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Talks start with energy industry reps on mandatory purchase scheme

Negotiations with a broad circle of energy industry representatives on the restructuring of Hungary's mandatory energy purchase scheme started on Tuesday, the National Development Ministry said.

State secretary for climate and energy affairs János Bencsik confirmed that the current mandatory energy purchase scheme would end on July 1, 2011 and be replaced by one that focuses on offering incentives for heat energy generated using renewable fuel.

In the case of biomass, which plays a major role among renewable energy sources, basic requirements are expected to include “a lower subsidizable capacity limit, higher efficiency and an increased enforcement of sustainability requirements”, the ministry said. In addition to heat generation, the subsidizing of electricity generation will continue for producers that use purely renewable energy sources, although in a different form.

The terms of phasing out gas-fuelled combined-cycle power plants from the mandatory energy purchase scheme are already being worked out, taking into account the view of industry professionals, the ministry said. In restructuring the regulatory system, the government will focus on ensuring that district heating service is provided to households at accessible prices, it added.

The new heat generation subsidy system is expected to take effect on October 15, 2011, after approval by the European Commission.