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Industry group envisions hiccups in power supply

Cogen Hungary, the association of cogenerating power plants believes that the review of support contracts by the government could lead to a shortage of electricity within six months.

The Hungarian government has decided to exclude cogenerating companies using natural gas for fuel from KÁT, the system regulating state purchase prices for power producers suffering a competitive disadvantage due to utilizing environmentally friendly technologies.

However, due to the fact that on the free market gas is expensive and electricity is comparatively cheap, the new situation will mean many smaller producers will have to shut down, Cogen Hugnary’s head Gábor Bercsi told Klubrádió. The resultant supply gap, especially considering the spike in demand when air conditioners are turned on as the weather gets warmer, could lead to serious supply issues within the next half year, he added.

Earlier, cogeneration plants were included in the KÁT system so that the state could control district heating prices, which is still rather expensive, but is more efficient than gas-based heating.

Development Minister Tamás Fellegi said the reason these operators would now be excluded is that they have mostly completed investments enjoying the benefits of the system and should no longer “siphon” money pout of the treasury.

Currently, 600,000 households, roughly 2 million people get their district heating from cogeneration plants.