COMMISSION DECISION
of 4 June 2008
on the State aid C 41/05 awarded by Hungary through Power Purchase Agreements
(notified under document C(2008) 2223)
(Only the Hungarian text is authentic)
(Text with EEA relevance)
(2009/609/EC)
1.
PROCEDURE
2.
DESCRIPTION OF THE MEASURE
Name of generation company |
Majority shareholder group |
Power plant under PPA |
Duration of PPA |
Budapesti Erőmű Rt. |
EDF |
Kelenföldi Erőmű |
1996-2011 |
Újpesti Erőmű |
1997-2021 |
||
Kispesti Erőmű |
2001-2024 |
||
Dunamenti Erőmű Rt. |
Electrabel |
Dunament F blocks |
1995-2010 (signed in 1995, entered into force in 1996) |
Dunament G2 block |
1995-2015 (signed in 1995, entered into force in 1996) |
||
Mátrai Erőmű Rt. |
RWE |
Mátrai Erőmű |
1995-2022 (initial duration until 2015, extended to 2022 in 2005) |
AES-Tisza Erőmű Kft. |
AES |
Tisza II Erőmű |
1995-2016 (signed in 1995, entered into force in 1996) ([…]) |
Csepeli Áramtermelő Kft. |
ATEL |
Csepel II Erőmű |
1997-2020 (signed in 1997, entered into force in 2000) |
Paksi Atomerőmű Rt. |
MVM |
Paksi Atomerőmű |
1995-2017(20) (signed in 1995, entered into force in 1996) |
Pannonpower Holding Rt. |
Dalkia |
Pécsi Erőmű |
1995-2010 (signed in 1995, entered into force in 1996) |
(MW) |
||||
Capacity |
2004 |
2005 |
2006 |
2007 |
Installed total generation capacity(27) |
8 777 |
8 595 |
8 691 |
8 986 |
Gross available capacity(28) |
8 117 |
8 189 |
8 097 |
8 391 |
Net available capacity(29) |
7 252 |
7 792 |
7 186 |
7 945 |
Peak load of the Hungarian electricity system |
6 356 |
6 409 |
6 432 |
6 605 |
(MW) |
|||||
Power plant |
Capacity |
2004 |
2005 |
2006 |
2007 |
Kelenföld |
Net available capacity |
90,1 |
97,6 |
97,2 |
78,0 |
Contracted capacity(31) |
83,3 |
89,8 |
89,4 |
71,9 |
|
Ujpest |
Net available capacity |
106,3 |
106,1 |
106,2 |
106,0 |
Contracted capacity |
99 |
98,8 |
98,9 |
98,7 |
|
Kispest |
Net available capacity |
46,1 |
110,2 |
110,2 |
109,6 |
Contracted capacity |
43 |
102,6 |
102,6 |
102,3 |
|
Dunament F |
Net available capacity |
1 020 |
1 020 |
1 020 |
1 020 |
Contracted capacity |
928,2 |
923,1 |
923,1 |
923,1 |
|
Dunament G2 |
Net available capacity |
187,6 |
223,1 |
223,1 |
223,7 |
Contracted capacity |
178,4 |
212,4 |
212,4 |
213 |
|
AES-Tisza |
Net available capacity |
638,0 |
824,7 |
824,7 |
824,7 |
Contracted capacity |
[…](32) |
[…](33) |
[…](33) |
[…](33) |
|
Csepel |
Net available capacity |
348,9 |
331 |
355 |
349,5 |
Contracted capacity |
323 |
307 |
329 |
324 |
|
Pannon |
Net available capacity |
25,9 |
25,9 |
25,9 |
25,9 |
Contracted capacity |
20,1 |
20,1 |
20,1 |
20,1 |
|
Mátra |
Net available capacity |
593 |
552 |
552 |
552 |
Contracted capacity |
496 |
460 |
460 |
460 |
|
Paks |
Net available capacity |
1 597 |
1 596 |
1 596 |
1 596 |
Contracted capacity |
1 486 |
1 486 |
1 485 |
1 485 |
|
Total net available capacity of the power plants under PPA |
|
4 652,0 |
4 886,6 |
4 910,3 |
4 885,4 |
Total contracted capacity |
|
[…](34) |
[…](35) |
[…](36) |
[…](37) |
(GWh) |
|||||
Power plant |
Produced electricity |
2004 |
2005 |
2006 |
2007 |
Budapest (including Kelenföld, Újpest and Kispest) |
Total generated electricity |
1 228 |
1 510 |
1 643 |
1 742 |
Own consumption |
87 |
89 |
91 |
84 |
|
Minimum guaranteed off-take |
Kelenfold: […] Ujpest: […] Kispest: […] |
Kelenfold: […] Ujpest: […] Kispest: […] |
Kelenfold: […] Ujpest: […] Kispest: […] |
Kelenfold: […] Ujpest: […] Kispest: […] |
|
Actual off-take |
939 |
1 302 |
1 451 |
1 538 |
|
Dunament(39) (F + G2) |
Total generated electricity |
4 622 |
3 842 |
3 450 |
4 300 |
Own consumption |
174 |
148 |
147 |
188 |
|
Minimum guaranteed off-take |
F: […] G2: […] |
F: […] G2: […] |
F: […] G2: […] |
F: […] G2: […] |
|
Actual off-take |
4 232 |
2 888 |
2 495 |
3 296 |
|
AES-Tisza |
Total generated electricity |
1 621 |
1 504 |
1 913 |
2 100 |
Own consumption |
96 |
97 |
117 |
116 |
|
Minimum guaranteed off-take |
[…] |
[…] |
[…] |
[…] |
|
Actual off-take |
1 525 |
1 407 |
1 796 |
1 984 |
|
Csepel |
Total generated electricity |
1 711 |
1 764 |
1 710 |
2 220 |
Own consumption |
48 |
49 |
48 |
53 |
|
Minimum guaranteed off-take |
[…] |
[…] |
[…] |
[…] |
|
Actual off-take |
1 662 |
1 715 |
1 661 |
2 166 |
|
Pannon(39) |
Total generated electricity |
673 |
266 |
237 |
232 |
Own consumption |
116 |
52 |
34 |
29 |
|
Minimum guaranteed off-take |
[…] |
[…] |
[…] |
[…] |
|
Actual off-take |
361 |
206 |
203 |
203 |
|
Mátra(39) |
Total generated electricity |
5 688 |
5 698 |
5 621 |
6 170 |
Own consumption |
675 |
670 |
667 |
710 |
|
Minimum guaranteed off-take |
[…] |
[…] |
[…] |
[…] |
|
Actual off-take |
3 730 |
3 762 |
3 587 |
4 082 |
|
Paks |
Total generated electricity |
11 915 |
13 833 |
13 460 |
14 677 |
Own consumption of the plant |
750 |
821 |
800 |
848 |
|
Minimum guaranteed off-take |
[…] |
[…] |
[…] |
[…] |
|
Actual off-take |
11 112 |
13 012 |
12 661 |
13 828 |
3.
GROUNDS FOR INITIATING THE PROCEDURE
3.1.
The PPAs
3.2.
Government Decree No 183/2002 (VIII.23) on stranded costs
4.
COMMENTS BY HUNGARY ON THE OPENING DECISION
5.
COMMENTS FROM INTERESTED PARTIES
5.1.
Comments on the individual assessment of the PPAs
5.2.
Comments on the existence of State aid
(i)
Wrong reference price/No advantageous prices
(ii)
Privatisation price
(iii)
Market investor principle
(iv)
Service of general economic interest
(v)
No advantage in long duration
5.3.
Applicability after accession
5.4.
Existing aid
5.5.
Validly concluded private agreements cannot be ended by the Commission (pacta sunt servanda) — Legal uncertainty
5.6.
Proportionality
5.7.
Comments on the compatibility of PPAs with the common market
6.
REPLY FROM HUNGARY ON COMMENTS FROM INTERESTED PARTIES
7.
ASSESSMENT BY THE COMMISSION
7.1.
Unlawful aid
7.2.
General comment on the individual assessment of the PPAs
7.3.
Existence of State aid within the meaning of Article 87(1) of the EC Treaty
‘ANNEX IV
List referred to in Article 22 of the Act of Accession
3.
Competition policy
(1)
Preliminary analysis: the reasoning that should be followed in order to assess the existence or otherwise of an advantage
(2)
Assessment of the existence of an advantage to the power generators when Hungary joined the European Union
(2)(a)
Short description of commercial practices on European electricity markets relevant for the assessment of the existence of an advantage within the PPAs
(2)(b)
Comparison of the PPAs with standard commercial practices
|
2004 |
2005 |
2006 |
Guaranteed off-take (GWh) |
23 234 |
23 528 |
23 516 |
Reserved capacities (MW) |
4 242 |
4 460 |
4 481 |
Ratio between minimum guaranteed off-take and reserved capacities (number of hours per year) |
5 477 |
5 275 |
5 248 |
Ratio between net electricity generation and net available generation capacities for all Hungarian power generation units (number of hours per year) |
4 272 |
4 225 |
4 601 |
(2)(c)
Foreseeable consequences of the PPAs for the public authorities in the light of the comparison with buyers’ standard commercial practices on European electricity markets
(GWh) |
||||
|
2003 |
2004 |
2005 |
2006 |
Total consumption |
33 584 |
33 836 |
34 596 |
35 223 |
Sales on the free segment |
3 883 |
7 212 |
11 685 |
13 057 |
Sales on the regulated segment |
29 701 |
26 624 |
22 911 |
22 166 |
Source: Statistical data of the Hungarian power system, 2006 (). |
(HUF/kWh) |
||
|
2003 |
2004 |
Average price on the free market |
11,1 |
12,7 |
Average prices on the public utility sector(62) |
19 |
21,1 |
Source: Statistical data on the Hungarian power system, 2006 |
|
First auction June 2003 |
Second auction December 2003 |
Third auction June 2004 |
Baseload products |
|||
Quantities of electricity sold (GWh) |
375 |
240 |
133 |
Sale prices on auctions (HUF/kWh) |
8,02 |
9,5 |
8,4 |
Off-peak load products |
|||
Quantities of electricity sold (GWh) |
|
259 |
421 |
Sale price on auctions |
|
5,6 |
3,5 |
Average annual PPA prices |
|||
|
2003 |
2004 |
|
|
11,3 |
11,7 |
(TWh) |
||||
Year |
2003 |
2004 |
2005 |
2006 |
Total sales by MVM through the release mechanisms(66) |
0,6 |
1,9 |
6,5 |
6,5 |
(3)
The impact of the PPAs on the market in the period following Hungary's accession to the European Union
HUF/kWh |
|||
Power plant under PPA |
2004 |
2005 |
2006 |
Dunament F blocks |
[…] |
[…] |
[…] |
Dunament G2 block |
[…] |
[…] |
[…] |
Tisza II |
[…] |
[…] |
[…] |
Pécs |
[…] |
[…] |
[…] |
Csepel II |
[…] |
[…] |
[…] |
Kelenföld |
[…] |
[…] |
[…] |
Újpest |
[…] |
[…] |
[…] |
Kispest |
[…] |
[…] |
[…] |
Mátra |
[…] |
[…] |
[…] |
Paks |
[…] |
[…] |
[…] |
Power plant |
2004 |
2005 |
2006 |
|||
Quantity (MWh) |
Price (HUF/kWh) |
Quantity (MWh) |
Price (HUF/kWh) |
Quantity (MWh) |
Price (HUF/kWh) |
|
Mátra ([…] blocks) |
989 097 |
8,15 |
972 813 |
8,33 |
1 082 699 |
9,26 |
Vértes |
157 701 |
8,02 |
942 999 |
8,79 |
1 213 622 |
10,51 |
Dunamenti […] block |
215 647 |
8,57 |
805 381 |
9,85 |
814 702 |
13,29 |
EMA |
133 439 |
11,07 |
129 252 |
11,83 |
101 607 |
12,92 |
AES Borsod |
[…] |
[…] |
18 301 |
11,25 |
n.a.(69) |
|
AES Tiszapalkonya |
364 869 |
12,76 |
86 673 |
9,87 |
119 218 |
14,27 |
Import |
2004 |
2005 |
2006 |
|||
Quantity (MWh) |
Price (HUF/kWh) |
Quantity (MWh) |
Price (HUF/kWh) |
Quantity (MWh) |
Price (HUF/kWh) |
|
Ukrainethrough Slovakia ([…](71)) |
1 715 200 |
[…](72) |
1 525 600 |
[…](72) |
1 311 400 |
[…](72) |
Switzerland through Slovakia ([…](71)) |
1 768 100 |
[…](72) |
1 761 700 |
[…](72) |
1 709 200 |
[…](72) |
Switzerland ([…](71)) |
631 700 |
[…](72) |
629 500 |
[…](72) |
626 200 |
[…](72) |
Year of delivery of auctioned product(75) |
Weighted average price at capacity auctions (HUF/kWh) |
Year of Tenders and Marketplace sales |
Average price at tenders and Marketplace (HUF/kWh) |
2004 |
4,7 |
2004 |
6,5 |
Auction of 17 June 2004 |
Off peak: 3,48 Base: 8,4 |
|
|
2005 |
5,4 |
2005 |
8,1 |
Auction of 9 December 2004 |
Off peak: 4,54 Base: 8,32 |
|
|
Auction of 10 June 2005 |
Off peak: 4,6 Base: 8,5 |
|
|
Auction of 21 July 2005 |
Base: 9,3 Peak: 10,42 |
|
|
2006 |
9,9 |
2006 |
9,1 |
Auction of 9 November 2005 |
Off peak: 6,02 Base: 9,74 Peak: 11,76 |
|
|
Auction of 31 May 2006 |
Base: 11,33 |
|
|
7.4.
Applicability of the PPAs after accession
7.5.
PPAs as ‘new aid’ as opposed to ‘existing aid’
Event |
Date |
Deadline after receipt of information |
Notification by Hungary |
31.3.2004 |
|
Questions by the Commission |
29.4.2004 |
29 days |
Answers by Hungary |
4.6.2004 |
|
Questions by the Commission |
10.8.2004 |
2 months and 6 days |
Answers by Hungary |
21.10.2004 |
|
Questions by the Commission |
17.1.2005 |
2 months and 27 days |
Answers by Hungary |
7.4.2005 |
|
Withdrawal of the notification by Hungary |
15.4.2005 |
8 days |