Hungary’s Ambitious Energy Storage Drive Receives €1.1 Billion Boost from EU

EU Approves State Aid Scheme to Accelerate Hungary’s Transition to Net-Zero Energy System

In a significant move towards a greener and more sustainable future, the European Commission has given its stamp of approval to Hungary’s groundbreaking energy storage initiative, backed by an impressive €1.1 billion ($1.2 billion) state aid scheme. With this financial boost, Hungary aims to drive the installation of at least 800MW/1,600MWh of cutting-edge energy storage projects, supporting the integration of renewable energy sources into its electricity system.

The scheme, endorsed under the EU’s Temporary Crisis and Transition Framework, embraces sectors crucial to hastening the transition away from fossil fuels. By facilitating large-scale energy storage projects, Hungary is taking a decisive step towards achieving its net-zero energy goals.

Hungary’s visionary plan not only focuses on domestic projects but also extends support to initiatives beyond its borders. Cross-border transmission capacity allows for power provision from external projects, making them eligible for funding. This remarkable opportunity is open to energy sector companies operating within Hungary, excluding financial institutions.

While various energy storage technologies qualify for support, lithium-ion batteries continue to be the preferred choice for most large-scale ventures. Through a rigorous competitive bidding process, the selected projects will receive grants, ensuring their implementation by the end of 2025. These grants will take the form of investment support during the construction phase, supplemented by a two-way contract for difference (CfD) mechanism. The CfD ensures annual payments during the first ten years of project operations, offering a range of guaranteed revenue.

To ensure swift progress, all projects must be built and operational within three years of signing the contract, giving Hungary a clear timeline to achieve its energy storage goals. The investment grant will be financed partially by Hungary’s share of the Recovery and Resilience Facility, with the remainder provided by a Modernisation Fund. Meanwhile, the ten-year annual support will be funded through a levy.

Hungary joins a list of countries, including Greece, Romania, Finland, Croatia, and Estonia, that have embraced EU funding, including the Recovery and Resilience program, to promote energy storage initiatives. Notably, system integrators Tesla and Wärtsilä have already made significant contributions to Hungary’s energy storage landscape with their large-scale Battery Energy Storage Systems (BESS) projects.

As Hungary paves the way for a more sustainable and resilient energy future, this historic state aid approval from the EU sets a remarkable precedent. With its ambitious targets, transparent selection process, and diverse funding mechanisms, Hungary is poised to become a leading force in energy storage innovation, driving the transition toward a cleaner, greener, and more sustainable Europe.

Source: Energy Storage News

Check Our Event: Grid Resilience & Ancillary Services 2023

Event Search
Upcoming Events