Overall assessment

Hungary will benefit from EUR 11.4 million (1st round) and EUR 8.5 million (2nd round) from the European Union’s Modernisation Fund to promote renewable energy generation in local communities. The first call was already published back in the autumn of 2021. The second call has been postponed due to the missing detailed regulation on energy sharing.

Detailed assessment

General: allocation, definition, transposition

Specific allocation for energy communities

There is a specific targeting, and budget allocation for energy communities. Specifically, 11.4 million euros have been set aside for priority investments titled "Development of energy communities".

Definition of energy communities in line with EU legislation

The definition of Energy communities is not optimal, leaving space for a wrong attribution of funds. The definitions of RECs and CECs transposed are not matching the goals of the European definitions.

The first call under the Modernisation Fund (2021 autumn) was open for all type of entities (including large energy companies) by committing to create and register an energy community. This paves the way for corporate capture, and raises questions about how effective control of energy communities by citizens will be ensured.

Proportionality of share of total fund allocated to energy communities

Pilot energy communities are mainly financed from the first call of the Modernisation Fund. However, major investment needs will arise after the detailed rules on energy sharing come into force. The number of officially registered energy communities is zero, but reaching the target number of the National Energy Strategy (at least one energy community in each of the 175 micro-regions of Hungary by 2030) would require higher levels of investment.

Availability of tailored financing tools

Only grants are available. Different financing tools available that fit different situations (e.g., loans, guarantees, blended finance) are not currently foreseen.

Link to a wider scope of activities and objectives

Link between energy communities, building renovation and energy efficiency

This information is not available yet.

Recognition of energy communities under multiple objectives

Energy communities are only recognised under the objective of renewable energy production.

Transparency and inclusiveness

Holistic strategy to provide financing across different levels of project development

There is no holistic strategy in place to provide financing across different levels of project development (i.e., facilitating grid access, one stop shops, awareness raising & capacity building, pilot financing, administrative, business model and legal advice)

Transparency of the design and communication of the schemes and measures

There is a lack of transparency around the design and communication of the different rounds of funding under the Modernisation Fund.

Selection criteria and the prioritisation of various social components

This level of information is not yet available.

Decentralised tender process

The process is managed in a centralised manner.

Existence of procedures to facilitate the participation of energy communities in open calls

The relevant managing authority (NFFKÜ - The International Fund Development and Coordination Agency) offers support for beneficiaries of the first call to register as energy communities and has established working groups to share information.

Stability and predictability of the programme through time

The second round of funding has been postponed without any timeline being announced.