A new proposal could eliminate the requirement for remote control regulation in solar power plants with a capacity of less than 5 megawatts (MW).
The automatic Frequency Restoration Reserve (aFRR) accreditation system was introduced in Hungary in 2022, requiring weather-dependent energy producers to have automatic balancing energy regulation capabilities. The Hungarian transmission system operator, MAVIR maintains balancing reserves to ensure grid stability in case of imbalance. However, this regulation allows MAVIR to disconnect non-residential solar power systems at any time to maintain the electricity grid’s balance.
Under the proposed amendment, the obligation to enable remote control regulation would remain only for solar power plants with a capacity exceeding 5 MW, while plants below this threshold would be fully exempt. This change would affect the range of obligated entities, including solar power investors and operators, as well as companies specializing in aFRR compliance. Furthermore, its impact would be felt across the entire Hungarian electricity grid’s security of supply.
While balancing costs in Hungary have generally decreased from their peak levels of one or two years ago, they remain high compared to regional benchmarks. From a national economic perspective, it is crucial to keep MAVIR’s balancing costs (the expenses related to maintaining regulatory reserves necessary for grid stability) as low as possible while ensuring that a sufficient number of assets remain controllable.
Considering these factors, although it is not official yet, independent aggregators are expected to set the aFRR accreditation requirement at 400 kilowatts (kW) instead of MAVIR’s suggested 5 MW. A 400 kW threshold is considered large enough to justify separate accounting, making it a viable business model without causing negative cash flow or significant additional costs. While raising the size threshold to 400 kW would reduce the number of affected power plants, the overall controllable capacity would decrease at a much lower rate. Although market participants largely agree on the need to raise the size limit for remote-controlled regulation, they do not support the proposed increase to 5 MW.
By Eszter Kamocsay-Berta, Managing Partner, KCG Partners Law Firm
