Security of supply on the Hungarian electricity market and the potential effects of social considerations on the future generation portfolio
Peter Kiss Partner
© 2006 KPMG Tanàcsadó Kft., a Hungarian limited liability company and a member firm of the KPMG network of independent member firms affiliated with KPMG International, a Swiss cooperative. All rights reserved.
Partner
This material is complete with verbal explanation only
Table of Contents
Supply security in the context of electricity supply
Fuel mix
Generation reserves
Internal transmission and distribution network
Internal transmission and distribution network
Cross-border capacities
The potential effects of social considerations on the future generation portfolio
Primary energy consumption outlook
Supply security in the context of electricity supply
Supply security:
It means that from all the necessary primary sources to the transmission system, everything is available and operating to generate and transmit electricity in a manner that enables to maintain the continuous electricity flow to consumers.
Supply security can be enhanced by diversification and redundancy. According to the definition provided above power plants, the transmission and distribution networks and the cross border capacities have significant effect on the supply security as it is presented on the chart below.
Supply security
© 2006 KPMG Tanàcsadó Kft., a Hungarian limited liability company and a member firm of the KPMG network of independent member firms affiliated with KPMG International, a Swiss cooperative. All rights reserved.
Transmission Production
Internal Network (regulation
and design)
Fuel mix
Cross- border capacities Generation
reserves
Fuel mix
Primary resources used for power generation in Hungary in 2005
The Hungarian power generation mix is based on three basic resources. The most important generation type of the Hungarian electricity sector is nuclear power. It has the highest ratio with 38,7% however natural gas also has a significant importance with 34,5%. The third most important resource is lignite which is based on local lignite stocks.
Though the generation portfolio is relatively diversified, in 2005 Hungary had to import 66%
of the primary resources used for power generation. The import is mainly originated from natural gas and oil, but significant volume of black coal was imported too.
Transmission Production
Supply security
Internal Network (regulation
and design)
Fuel mix
Cross- border capacities Generation
reserves
Braun Coal 3,7%
Lignite
14,4% Black Coal Oil1,4%
1,3%
Gas 34,5%
Hydro 0,6%
Biomass 4,5%
Other renewable
0,8%
Nuclear 38,7%
Source: MVM – Statistical Data of the Hungarian Electricity System, 2005
Generation reserves
9 000 10 000 11 000 12 000
The average Hungarian power plant is over 19 years old, as such, 4,000 MW of generation retirements are expected during the next ten years.
Currently the peak load of the Hungarian system is just under 7,000 MW while the inbuilt capacity of the power plants is just exceeding the 8,000 MW.
Between 2009 and 2010 the capacity of the currently operating power plants will not be enough as a result of the increasing load and decommissioning.
Transmission Production
Supply security
Internal Network (regulation
and design)
Fuel mix
Cross- border capacities Generation
reserves
© 2006 KPMG Tanàcsadó Kft., a Hungarian limited liability company and a member firm of the KPMG network of independent member firms affiliated with KPMG International, a Swiss cooperative. All rights reserved.
0 1 000 2 000 3 000 4 000 5 000 6 000 7 000 8 000
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Source: MAVIR – Long and Medium Term Generating Capacity Plan of Hungary
Internal transmission and distribution network
The Hungarian Energy Office is in place to ensure the supply security of the transmission and distribution network.
A measurement system is worked out and monitored containing the following main indices:
•Duration and number of breakdowns of transmission lines
Transmission Production
Supply security
Internal Network (regulation
and design)
Fuel mix
Cross- border capacities Generation
reserves
•Duration and number of breakdowns of transmission lines
•Duration and number of outages of the medium- and low-voltage systems
These indices are monitored and published on a yearly basis by the Energy Office. The Energy Office is also responsible for setting up and monitor caps. Obviously the caps are different for all the DSO as a result of the different distribution system.
Internal transmission and distribution network
0,123 0,149
0,128 0,122
0,108 0,105 0,108 0,088
0 0,02 0,04 0,06 0,08 0,1 0,12 0,14 0,16
1998 1999 2000 2001 2002 2003 2004 2005 Outage index for the natianal network (sold but not
supplied volume ratio in 0/00)
Some examples for measuring supply security:
2,29 2,13 2,03 2,05
1,9 1,77
0 0,5 1 1,5 2 2,5
2000 2001 2002 2003 2004 2005 The frequency of unplanned outages (pcs per
consumer)
Transmission Production
Supply security
Internal Network (regulation
and design)
Fuel mix
Cross- border capacities Generation
reserves
© 2006 KPMG Tanàcsadó Kft., a Hungarian limited liability company and a member firm of the KPMG network of independent member firms affiliated with KPMG International, a Swiss cooperative. All rights reserved.
1998 1999 2000 2001 2002 2003 2004 2005
13,9 14,56 12,67
11,55 11,24 9,54
8,09 7,55
0 2 4 6 8 10 12 14 16
1998 1999 2000 2001 2002 2003 2004 2005 Low voltage outages (pcs/1000 consumer)
2000 2001 2002 2003 2004 2005
4,02 4,17
3,28
2,59 2,31
2,03
0 0,5 1 1,5 2 2,5 3 3,5 4 4,5
2000 2001 2002 2003 2004 2005 Duration of unplanned otages (hours/consumer)
Source: Hungarian Energy Office
Cross-border capacities
The supply security is also depending on the cross border transmission capacities and on the volume of imported energy. The cross-border capacities of Hungary is sufficient however the import volume is far too high. The import ratio should not reach the 20% level defined by the UCTE with respect to the supply security, but in 2004 the import volume nearly reached this volume.
0,25
Electricity import of Hungary as a % of the total consumption
Transmission Production
Supply security
Internal Network (regulation
and design)
Fuel mix
Cross- border capacities Generation
reserves
0,021 0,03
0,097 0,087
0,115
0,183 0,198
0,162
0 0,05 0,1 0,15 0,2
1998 1999 2000 2001 2002 2003 2004 2005
Source: MVM – Statistical Data of the Hungarian Electricity System, 2005
The potential effects of social considerations on the future generation portfolio
68 65 68 67
63
73
68
73 75
70 80 90 100
Acceptance of nuclear power generation in Hungary (in %)
Yes No
Not answered
According to the public surveys the acceptance of nuclear power generation is high in Hungary. The acceptance level reached the 75% in 2004.
© 2006 KPMG Tanàcsadó Kft., a Hungarian limited liability company and a member firm of the KPMG network of independent member firms affiliated with KPMG International, a Swiss cooperative. All rights reserved.
23
30
25 28 31
24 23 24 23
9 5 7 5 6
3
9
3 2
0 10 20 30 40 50 60
1991 1996 1997 1998 1999 2001 2002 2003 2004
%
Source: Paks Nuclear Power Plant - 2005
Primer energy consumption outlook
Source: MAVIR - 2005
Nuclear
Lignite
Contact information
Péter Kiss Partner
KPMG Tanácsadó Kft 1139 Budapest
Váci út 99
© 2006 KPMG Tanàcsadó Kft., a Hungarian limited liability company and a member firm of the KPMG network of independent member firms affiliated with KPMG International, a Swiss cooperative. All rights reserved.
