Electricity storage: market-based, targeted, efficient – we submitted our opinion on the draft government decree

The spread of solar energy makes the rapid deployment of electricity storage systems inevitable in Hungary. To achieve this, authorisation procedures must be simplified and accelerated so that storage units can be connected to the system as soon as possible.

In our view, supporting market-driven investments is more important than providing general state financing. Storage systems installed at solar power plant sites are particularly beneficial, as they also reduce the costs of grid development. Storage solutions that balance peak-time prices and operate purely on a market basis are already viable today, so in our opinion, they do not require additional subsidies.  

Grid-level storage systems providing services such as frequency regulation are a different case. However, in these cases, we deem support acceptable only and strictly to the extent and duration truly necessary, in order to avoid overcompensation and rent-seeking.

We recommend that selection under the revenue compensation scheme should continue to be based on the principle of lowest cost. At the same time, the regulation should clearly state the requirement to transition towards purely market-based operation as soon as possible, and to carry out an annual review of the support scheme.

To sum up: our position is that electricity storage systems should primarily be incentivised to operate on a market basis, and state intervention should be limited to grid-level storage capacities only.

You can read our full opinion (in Hungarian) here: Véleményünk a villamosenergia-tárolókkal kapcsolatos rendelettervezetről (PDF)