Energy Client Alert
After two successful METÁR tenders1, on April 30, 2021 the Hungarian Energy and Public Utility Regulatory Authority launched the third METÁR tender to support renewable electricity producers under the green premium scheme.
The upcoming auction will take place between July 1, 2021 and July 30, 2021, with a yearly maximum support budget of HUF 450 million and a maximum subsidized volume of 300 GWh/year.
As in the previous tenders, the renewable premium support is earmarked for new investment projects and existing plant units that undergo major refitting or development at a cost exceeding 50% of the initial investment cost.
As before, applicants can be companies with a registered office in the EU, the EEA or the Energy Community, Hungarian branch offices of foreign companies and Hungarian business entities or municipalities. However, the METÁR tender is only available to projects located in Hungary. For various considerations, bidders have been generally Hungarian entities.
In the upcoming METÁR tender there will be two tender categories based on the nominal capacity of bidding projects:
The tender rules set separate limitations with respect to bidders belonging to the same ultimate beneficial owner(s) (“UBO(s)”):
Applicants will need to make a proposal for the initial subsidized price that may not be higher than HUF 27.32/kWh. Winning projects must start commercial operations within 3 years and the maximum term of the subsidy is 15 years again (may be reduced by other support).
Tender participation is conditional upon providing tender security, while winning bidders must provide and maintain performance security for implementation of the project. The amount of the tender security is 1.5%, while the amount of the performance security is 5% of the benchmark investment value2 defined in the tender invitation.
As anticipated, the upper threshold of the Big Category has been lowered from 49.99 MW to 20 MW, hence, it will be interesting to see how decreasing the capacity will influence the bidding prices of the upcoming tender. Some tender rules, such as the 1 km rule, the statements on the identification of UBO(s) and the development site requirements have been slightly changed, so we recommend that you analyze the tender invitation carefully before you submit your tender proposal.
Our energy team has vast experience in advising on the preparation and submission of tender proposals, so please feel free to contact our experts should you require legal advice or assistance regarding tender requirements or any other energy related matters.
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