Management of the Hungarian Energy Office - Magyar Energia Hivatal

hungarian energy office
COMPETITION
In 2009, the operation of the Hungarian electricity market was
determined by the demand decreasing effect of the crisis and
the transformation at the end of 2008 of the previous system
that was based on long term PPAs concluded between MVM
and power plants. The basic elements of the regulation based
on the parallel operation of universal service and free market
has remained unchanged.
In 2009, the circle of customers entitled for universal service
was extended by an amendment in law in 2008. The Gas
Act passed on 9 June 2008 increased the limit for connection
capacity entitling for universal service to 3x63 A and extended
the right for universal service to given general government units specifi ed in a separate legislation, local governments,
Table 1 Share of regulated (public utility segment and universal service) and free
market consumption in total consumption (%)
Free market
2004 2005 2006 2007 2008 2009
20.0 32.8 36.7 21.9 64.4 60.0
Public utility 80.0 67.2 63.3 78.1 35.6 40.0
Table 2 Market share of domestic power plant companies (groups) in terms of
installed capacity (2007) and production (2009) 1
2
MVM
3
Electrabel
4
AES
5
RWE
6
Atel
7 EdF
Other domestic power plants
Total domestic power plant
Net import
Gross consumption
The 3 largest power plant
9 companies
HHI-index 10
annual report 2009 | 16
Installed
capacities
(MW)
863
8 846
-
5 433
Market
shares
(in terms of
capacity)
14%
4%
5%
-
1. Power plant companies in the Table correspond to investor groups owning
power plants. To be simple, we did not try to exclude power plant units
active in the market of ancillary services (e.g.. Dunamenti F, or AES Tisza
blocks)
2. MVM: Paksi Atomerőmű Zrt. (Paks Nuclear Power Plant), Vértesi Erőmű
Zrt. (Vértes Power Plant), Gázturbinás Erőműveket Üzemeltető és
Karbantartó Kft. (an Ltd. operating and maintaining gas engine power
plants)
3. Electrabel: Dunamenti Erőmű Zrt.
4. AES: AES-Tisza Erőmű Kft, AES Borsod Energetikai Kft.
5. RWE: Mátrai Erőmű Zrt.
6. Atel (Alpiq since 1 February 2010): Csepeli Áramtermelő Kft.
7. EdF: Budapesti Erőmű Zrt.
8. Total share of power plant investors having a market share of less than 5%
9. The three largest power plant companies calculated on the basis of
installed capacities (MVM, Electrabel, AES) differs from the three largest
ones calculated on the basis of production (MVM, RWE, AES).
10. Compensation values would be higher if available or the effectively
accessable capacity were taken into account, and lower if import
capacities were taken into account
11. Calculated based on gross installed capacity data (fi gures of 2007).
12. (Net) production of a given power plant company fed in into the network
devided by national gross consumption (fi gures of the year 2009).
8
Production
(TWh)
15.1
1.5
1.6
5.1
Market
shares
(in terms of
production)
46%
5%
5%
16%
3%
83%
11 12
56%
1 813
local government units performing public
tasks, legal entities of churches performing
public tasks and institutions maintained
by foundation, performing public tasks.
The extended circle of customers entitled
for universal service resulted in the fact that
several medium and small size customers
left free market by 2009. Therefore, the
share of the customers circle affected by
administrative price regulation shifted
from 36% to 40% of the total consumption.
(The structure of the decline in demand
also contributed to the decreased share
of free market consumption: the demand/
consumption of industrial customers
buying electricity typically on free market
dropped to a larger extent than that of
small and medium size customers opting
for universal service.)
The economic recession resulted in a
decline in electricity consumption of
approximately 5%. Decreased demand
was accompanied by a drastic fallback in
the output of domestic power plants (10%)
and by a signifi cant rise in net import. The
total share of domestic producers within
gross consumption dropped from 90% to
83%, while the share of net import within gross consumption,
which decreased temporarily to 10% in 2007-2008 compared
to 15-20% in the year subsequent to market opening,
approached 20% again in 2009.
There was a signifi cant change in the relative market position
of power plant investors: while the total production of
baseload producers (Paks, Mátra) slightly rose, production of
natural gas fuelled large power plants halved. Since the above
baseload producers constituted a part of MVM’s contracted
portfolio also in 2009, the MVM-focused nature of wholesale
market failed to change; majority of electricity required to
satisfy domestic consumption (near two thirds) was still sold
through MVM group to universal service suppliers and traders
supplying customers.