Attention, Real Estate Developers And Energy Professionals In Hungary! The Legal Framework Of The World Behind The Meter Has Arrived!

• Published date: 22 January 2024
• Subject Matter: Real Estate and Construction, Energy and Natural Resources, Energy Law, Real Estate, Landlord & Tenant - Leases
• Law Firm: Kinstellar
• Author: Mr Péter Gullai

January 2024 - As of 1 January 2024, material amendments to several Hungarian energy laws have come into effect, including, among others, the Hungarian Electricity Act (Act LXXXVI of 2007), which has been significantly changed. These changes materially affect decentralised (local) power generation, which has been a focus of the real estate industry in recent times. Below we provide an overview of the main changes in Hungary that may facilitate local power generation, storage, and procurement from electricity sources other than power traders.

The long-awaited change to the concept of a private power distribution line (in Hungarian: mag'nvezeték), based on the EU's definition of a "closed distribution system," ensures the appropriate categorisation of the tenants and other users of areas and premises in any industrial or commercial real estate.

The term "electricity sharing" has been supplemented to allow electricity to be shared with end-users through a private line, which makes it clear that a landlord's supply of renewable energy sources to tenants is allowed. In line with this change, the definition of a "prosumer" (active customer) has also been amended, such that a prosumer is now entitled to forward or share the electricity generated or stored by itself through a private line. It is also clearly stated that, in this case, a contracting obligation applies to the parties, and that sharing electricity does not qualify as electricity trading or electricity resale.

A new license category has also been introduced, the "self-supply generation licence," which is to be requested by the operator of a self-supply generating unit, defined as a...