The sale of the generated electricity by renewable energy
generators through market-based long-term power purchase agreements
(PPAs) is a fairly new phenomenon in the Hungarian electricity
market. Whilst PPAs have already been concluded between
conventional power plants and off-takers in the past, the interest
towards renewable PPAs has only started to increase recently,
primarily for the following reasons:
Firstly, over the last few years the economics of renewable
energy generation has substantially improved, and renewable energy
generation has become more and more competitive with conventional
forms of power generation.
Secondly, the governments started to gradually phase out many of
the formerly existing “old school” renewable subsidy
schemes, including the KÁT subsidy scheme in Hungary.
Thirdly, the dramatic increase and the volatility of the wholesale
electricity prices increased the demand for longer time fixed price
electricity sourcing arrangements.
