Europe

Bayernwerk to build Hungarian IPP

Issue 6 and Volume 7.

Bayernwerk to build Hungarian IPP

German utility Bayernwerk has announced that it is to build a 100 MW natural gas fired power plant at Debrecen in eastern Hungary. The plant will operate as an independent power producer, supplying power directly into the network operated by distribution group Titasz.

Bayernwerk will start to construct the plant this summer and has scheduled commercial operation for 2000. Titasz will become the first Hungarian electricity distributor to buy power from a source other than state power company MVM.

Only in certain cases, with MVM`s approval, can a generator directly supply a distributor in Hungary. Bayernwerk`s direct supply to Titasz will be the first example of its kind in the country, although further projects are planned as the market is gradually liberalized.

All power plants are currently obliged by law to sell all of their output to MVM unless they have an agreement with a single buyer. However, the country is gradually liberalizing its energy market in accordance with European Union requirements. It believes that ten per cent of the electricity market will be liberalized by 2001.

The cost of the plant is estimated to be $92m to $123m, representing the German group`s largest single investment to date. Other companies developing IPPs in Hungary include PowerGen.