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Load Reduction and Disconnection of Large Electricity Consumers During an Electricity Supply Crisis – What You Need to Know

The Current Situation

As a result of the extreme heat and prolonged drought, the Danube’s water level at Paks has fallen to a historic low of –138 cm and continued to decline. Consequently, the fixed-elevation cooling water pumps of the Paks Nuclear Power Plant are no longer able to extract sufficient cooling water. In addition, the temperature of the Danube may not exceed 30°C, meaning that, alongside the reduced river flow, the discharge of cooling water has also become restricted. Together, these two technical constraints have caused the output of the 2,000 MW Paks Nuclear Power Plant to gradually decline, and it is highly likely that the plant will have to be shut down completely.

The reduction in Hungarian generation is not unique within the region. One unit of Romania’s Cernavodă Nuclear Power Plant has also been shut down, Serbia’s Đerdap 1 hydropower plant is operating at reduced capacity (approximately 20% of its nominal capacity, according to Reuters), and generation at Serbia’s Kostolac coal-fired power plant has also been reduced due to the low water level.

The lost nuclear generation is currently being replaced primarily by solar power plants, which provide more than 85% of Hungary’s domestic electricity generation during daylight hours, while fossil-fuel-fired power plants account for approximately 10%. However, solar generation can only compensate for the missing nuclear output until sunset.

The period between 17:00 and 22:00 is expected to become the most critical for maintaining system balance, as electricity demand remains high while solar generation declines rapidly. During these hours, the power system becomes increasingly dependent on imports, fossil-fuel-fired power plants, energy storage facilities and, if necessary, electricity demand reduction measures in order to satisfy demand.

Consequently, this is precisely the period during which MAVIR may need to apply the extraordinary measures introduced under the new government decree.

On 1 August, at 19:00, Government Decree 118/2026 (VIII. 1.) entered into force, amending Government Decree 280/2016 (IX. 21.) on the measures to be taken in the event of a major disturbance of the electricity system or an electricity supply emergency.

Important: The situation is changing from hour to hour, and the official classification of the system status is based on technical indicators—primarily the amount of available remaining capacity (MW)—which can only be confirmed in real time by MAVIR (the Hungarian Transmission System Operator) and the Hungarian Energy and Public Utility Regulatory Authority (MEKH).

The information below has been prepared on the basis of publicly available information at the time of publication. For the latest official status, please follow the announcements of MAVIR and MEKH.

In Brief – The New Government Decree

What should you know about the new electricity load reduction rules?

The new regulation applies to every company that has contracted electricity capacity of at least 500 kW at any of its sites.

If an electricity supply security issue arises within the power system (as is currently the case), MAVIR may contact large electricity consumers already at the stage of a major disturbance.

For this reason, we recommend that all affected companies designate a 24/7 contact person who can be reached at any time.

The procedure is implemented in stages:

Voluntary request for electricity demand reduction (by telephone or e-mail)

  • Primarily during the peak demand period (expected between 17:00 and 22:00).
  • Compliance is voluntary, but cooperation is expected.
  • Any losses resulting from reduced production are borne by the company.

Mandatory electricity demand reduction order

  • MAVIR specifies the maximum level of electricity demand permitted.
  • Consumption may only be maintained at the minimum level necessary for the safe operation of the technology.
  • No compensation is provided for lost production or lost revenue.

If the company fails to comply

  • MAVIR may impose a charge equal to 200% of the HUPX day-ahead market price on the excess electricity consumed.
  • MAVIR may issue a further notice with a 2-hour compliance deadline.
  • If the company still fails to comply, MAVIR may initiate the disconnection of the site’s electricity supply for the entire duration of the crisis.

What Should Companies Prepare For?

Based on the current condition of the power system, it is realistic to expect that, over the coming days or weeks, some electricity consumers with contracted capacity above 500 kW may receive either voluntary requests or mandatory instructions to reduce their electricity consumption, particularly during the 17:00–22:00 evening peak period.

Companies are therefore advised to consider in advance:

  • which technologies or production processes can be shut down or rescheduled;
  • what their minimum safe electricity demand is;
  • who will receive and manage notifications from MAVIR; and
  • what business continuity plan will be implemented in the event of an electricity restriction lasting several hours or several days.

A detailed summary of the new regulation is provided below.

Detailed Summary of the Government Decree

1. Who Is Affected by the New Regulation?

The Decree defines a large electricity consumer as any user having contracted capacity of at least 0.5 MW (500 kW) at one or more consumption sites. The new provisions set out in Sections 24/A–24/B of the Decree apply directly to all businesses meeting or exceeding this threshold.

2. When Can Load Reduction or Disconnection Be Ordered?

The Decree formally distinguishes four system conditions, listed in increasing order of severity:

  • Major Disturbance
  • Threat of Electricity Supply Emergency – Level I
  • Threat of Electricity Supply Emergency – Level II
  • Electricity Supply Emergency

These system states are determined by the transmission system operator based primarily on the level of available remaining capacity (measured in MW), as well as other factors such as restrictions in natural gas supply or transmission network separation.

The two instruments available for large electricity consumers—the voluntary request and the mandatory instruction—do not apply under identical circumstances.

Instrument Applicable System Conditions
Voluntary Request (Section 24/A) Imminent threat of a major disturbance (the earliest, informal stage without predefined thresholds) → Major Disturbance → Threat Level I → Threat Level II. It may not be used once an Electricity Supply Emergency has been declared.
Mandatory Instruction (Section 24/B) Major Disturbance → Threat Level I → Threat Level II → Electricity Supply Emergency. It cannot be used during the initial “imminent threat” stage but remains available throughout an Electricity Supply Emergency.

The Most Important Practical Point

The procedure applicable to large electricity consumers may begin already at the stage of a Major Disturbance. Consequently, the current officially confirmed status of Major Disturbance alone provides sufficient legal basis for MAVIR to issue either a voluntary request or a mandatory instruction to affected large electricity consumers.

It is important to note, however, that these two instruments do not necessarily have to follow one another in strict sequence. Should the situation suddenly escalate directly into an Electricity Supply Emergency, the transmission system operator may issue a mandatory instruction immediately, without first making a voluntary request, since the voluntary instrument provided under Section 24/A is no longer available once an Electricity Supply Emergency has been declared.

3. The Two, Partially Overlapping Instruments

3.1 Voluntary Request (Section 24/A)

In the event of an imminent threat of a Major Disturbance, during a Major Disturbance, or during a Threat of Electricity Supply Emergency (Level I or II), MAVIR may propose that a large electricity consumer reduce its electricity consumption.

The proposal may be delivered directly by MAVIR, or through the distribution system operator that has a contractual relationship with the large consumer. Notification may be made by e-mail or by recorded telephone call, while the affected electricity supplier is informed simultaneously.

At this stage:

  • compliance with the request is not legally enforceable; however, the large consumer is expected to respond to the extent reasonably expected;
  • any damage or financial loss resulting from compliance is not subject to reimbursement or compensation;
  • MAVIR may amend the proposal while it is in effect, including making the requested reduction more stringent;
  • this instrument may no longer be applied once an Electricity Supply Emergency has been declared.

3.2 Mandatory Instruction (Section 24/B)

During a Major Disturbance, a Threat of Electricity Supply Emergency (Level I or II), or an actual Electricity Supply Emergency, MAVIR may issue a mandatory instruction to a large electricity consumer.

Accordingly, this instrument cannot be applied during the earliest “imminent threat” stage, but may be applied throughout an Electricity Supply Emergency.

The instruction requires the large consumer to reduce electricity demand to a specific, quantified power level.

The minimum level to which consumption may be reduced is the level required for the safe operation of equipment without causing damage. A large consumer cannot be required to reduce consumption below this technical minimum, but it is obliged to reduce consumption to that level.

Any financial loss resulting from compliance with the mandatory instruction—including lost production or lost profit—is borne by the large electricity consumer. No compensation is payable under the legislation.

4. What Happens in the Event of Non-Compliance?

This is one of the most important parts of the Decree, as it establishes the financial and operational consequences of non-compliance.

4.1 Financial Penalty

If the actual amount of electricity consumed exceeds the limit specified in the mandatory instruction, MAVIR may enforce a financial claim in respect of the excess consumption.

Calculation Element Description
Basis The difference between the actual electricity consumed and the quantity permitted under the mandatory instruction
Price The average HUPX Day-Ahead quarter-hour market price applicable to the relevant period
Multiplier 200% (i.e. twice the market price)

Technically, the settlement is not carried out directly with the large electricity consumer. Instead, the relevant distribution system operator or electricity supplier is required to enforce the payment claim on behalf of MAVIR.

4.2 Repeated Notice

If the mandatory instruction is not complied with, MAVIR—acting with the involvement of the national disaster management authority—will contact the large electricity consumer directly through a verifiable communication method and issue a second notice granting a two-hour deadline to comply with the instruction.

4.3 Disconnection

If the required load reduction is still not implemented within the two-hour deadline, MAVIR may initiate the complete disconnection of the large electricity consumer from the electricity supply.

The disconnection may remain in force throughout the entire duration of the Major Disturbance, the Threat of Electricity Supply Emergency, or the Electricity Supply Emergency. Consequently, the interruption may last not merely for several hours but potentially for several days.

Once the emergency has ended, the distribution system operator must reconnect the affected consumer within 24 hours.

5. Summary of the Procedure

Step What Happens Consequence
1 Voluntary request (by e-mail or telephone) to reduce electricity consumption Cooperation is expected but not enforceable; no compensation is payable
2 Mandatory instruction specifying a maximum permitted demand level Compliance is mandatory down to the minimum level required for safe operation; any financial loss is borne by the consumer
3 Financial claim in the event of non-compliance Excess consumption is charged at 200% of the applicable HUPX Day-Ahead market price
4 Second notice with a two-hour compliance deadline Final opportunity to avoid disconnection
5 Disconnection for the duration of the crisis May remain in effect for several days; reconnection must take place within 24 hours after the crisis ends

6. What Can Be Expected in the Coming Days?

Based on the information currently available, the development of the situation is expected to follow the procedural framework established by the legislation.

As long as the electricity system remains in the Major Disturbance stage, large electricity consumers are expected to receive primarily voluntary energy-saving requests and voluntary load reduction proposals, mainly targeting the evening peak period between 17:00 and 22:00.

If the output of the Paks Nuclear Power Plant declines further or the plant is shut down completely, and the resulting generation shortfall cannot be fully compensated by other domestic power plants, reserve capacities or electricity imports, it is realistic that the system will progress to Threat of Electricity Supply Emergency Level I, followed by Level II.

In parallel with this escalation, mandatory instructions are expected to replace voluntary requests for the affected large electricity consumers, requiring them to reduce electricity demand to specified power levels.

If mandatory instructions cannot be broadly enforced, or if the capacity shortage continues to worsen, the system may ultimately reach the stage of an Electricity Supply Emergency. In that case, rotating outages affecting residential consumers (rolling blackouts) may also become necessary. However, according to the logic of the legislation, such measures would only be introduced after load reduction by large electricity consumers and all other available market-based measures have proved insufficient.

The de-escalation of the situation—including the reduction and eventual termination of the emergency levels—is expected to depend primarily on the recovery of the Danube’s water level and the restart of the Paks Nuclear Power Plant. According to expert statements, restarting the plant after a complete shutdown may require up to one week, owing to the need to re-establish stable cooling water conditions.

Overall, large electricity consumers should be prepared for the possibility that, over the coming days and weeks, they may receive repeated—and potentially increasingly stringent—requests and mandatory instructions to reduce electricity demand, particularly during the 17:00–22:00 evening peak period.

 

Sources: 280/2016. (IX. 21.) Korm. rendelet, 118/2026. (VIII. 1.) Korm. rendelet, Magyar Közlöny 2026./104.

03.08.2026

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Average European gas storage levels have now fallen below 50%

Average European gas storage levels have now fallen below 50%

Current levels are only marginally above the “record-low” levels seen in 2022, and more than 10 percentage points below the already weak 2025 levels.
The extreme cold weather experienced in recent weeks, combined with forecasts pointing to persistently low temperatures, is further intensifying concerns around the pace of storage withdrawals. These worries are compounded by geopolitical risks, missing French nuclear capacity, and below-average renewable generation.

At the same time, TTF front-month prices have risen by more than one third since the beginning of the year. Based on recent years’ experience, there is a strong correlation between storage withdrawals and TTF FM price movements.
We continue to closely monitor weather and market forecasts and report on all key developments in our daily market updates.

 

Written by: Tóth Eszter Lilla

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  •  90% emissions reduction by 2040 compared to 1990 levels. At least 85% to be achieved through domestic measures.Up to 5% through high-quality international carbon credits (pilot phase 2031–2035, full use from 2036). This represents greater flexibility than the European Commission’s initial proposal, which would have allowed only 3% credit use. The Council emphasizes that the target should remain legally binding, while acknowledging variations in competitiveness, social impacts, and national circumstances.

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Expanding the credit allowance gives industries and member states more room to manage their decarbonization pathways. However, it raises questions about whether this could slow down domestic clean investment efforts.

EU ETS2 Launch Delay: 2027 ➜ 2028

  • Ministers propose delaying the start of the new emissions trading system covering buildings and road transport by one year.

Rationale: Shielding households and small businesses amid ongoing energy price volatility.

Additional points discussed:

  • A slower phase-out of free allowances for heavy industry under the existing ETS A review clause to address energy price impacts on competitiveness and consumers.

What’s Next?

  • The European Parliament will vote on its negotiating mandate next week. A final compromise will be shaped in trilogue negotiations between the Parliament, Council, and Commission in the coming months.

Bottom line:

The ambition remains high, but the transition path is becoming more pragmatic, with stronger focus on social acceptance and economic resilience.

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Key Updates in EU Climate Policy 4

EU environment ministers have adopted a joint negotiating position on the 2040 emissions reduction target, providing more flexibility to member states compared to the European Commission’s earlier proposal.

Main Elements of the Agreement

  •  90% emissions reduction by 2040 compared to 1990 levels. At least 85% to be achieved through domestic measures.Up to 5% through high-quality international carbon credits (pilot phase 2031–2035, full use from 2036). This represents greater flexibility than the European Commission’s initial proposal, which would have allowed only 3% credit use. The Council emphasizes that the target should remain legally binding, while acknowledging variations in competitiveness, social impacts, and national circumstances.

Why does this matter?

Expanding the credit allowance gives industries and member states more room to manage their decarbonization pathways. However, it raises questions about whether this could slow down domestic clean investment efforts.

EU ETS2 Launch Delay: 2027 ➜ 2028

  • Ministers propose delaying the start of the new emissions trading system covering buildings and road transport by one year.

Rationale: Shielding households and small businesses amid ongoing energy price volatility.

Additional points discussed:

  • A slower phase-out of free allowances for heavy industry under the existing ETS A review clause to address energy price impacts on competitiveness and consumers.

What’s Next?

  • The European Parliament will vote on its negotiating mandate next week. A final compromise will be shaped in trilogue negotiations between the Parliament, Council, and Commission in the coming months.

Bottom line:

The ambition remains high, but the transition path is becoming more pragmatic, with stronger focus on social acceptance and economic resilience.

More

Key Updates in EU Climate Policy 3

EU environment ministers have adopted a joint negotiating position on the 2040 emissions reduction target, providing more flexibility to member states compared to the European Commission’s earlier proposal.

Main Elements of the Agreement

  •  90% emissions reduction by 2040 compared to 1990 levels. At least 85% to be achieved through domestic measures.Up to 5% through high-quality international carbon credits (pilot phase 2031–2035, full use from 2036). This represents greater flexibility than the European Commission’s initial proposal, which would have allowed only 3% credit use. The Council emphasizes that the target should remain legally binding, while acknowledging variations in competitiveness, social impacts, and national circumstances.

Why does this matter?

Expanding the credit allowance gives industries and member states more room to manage their decarbonization pathways. However, it raises questions about whether this could slow down domestic clean investment efforts.

EU ETS2 Launch Delay: 2027 ➜ 2028

  • Ministers propose delaying the start of the new emissions trading system covering buildings and road transport by one year.

Rationale: Shielding households and small businesses amid ongoing energy price volatility.

Additional points discussed:

  • A slower phase-out of free allowances for heavy industry under the existing ETS A review clause to address energy price impacts on competitiveness and consumers.

What’s Next?

  • The European Parliament will vote on its negotiating mandate next week. A final compromise will be shaped in trilogue negotiations between the Parliament, Council, and Commission in the coming months.

Bottom line:

The ambition remains high, but the transition path is becoming more pragmatic, with stronger focus on social acceptance and economic resilience.

More

Key Updates in EU Climate Policy 2

EU environment ministers have adopted a joint negotiating position on the 2040 emissions reduction target, providing more flexibility to member states compared to the European Commission’s earlier proposal.

Main Elements of the Agreement

  •  90% emissions reduction by 2040 compared to 1990 levels. At least 85% to be achieved through domestic measures.Up to 5% through high-quality international carbon credits (pilot phase 2031–2035, full use from 2036). This represents greater flexibility than the European Commission’s initial proposal, which would have allowed only 3% credit use. The Council emphasizes that the target should remain legally binding, while acknowledging variations in competitiveness, social impacts, and national circumstances.

Why does this matter?

Expanding the credit allowance gives industries and member states more room to manage their decarbonization pathways. However, it raises questions about whether this could slow down domestic clean investment efforts.

EU ETS2 Launch Delay: 2027 ➜ 2028

  • Ministers propose delaying the start of the new emissions trading system covering buildings and road transport by one year.

Rationale: Shielding households and small businesses amid ongoing energy price volatility.

Additional points discussed:

  • A slower phase-out of free allowances for heavy industry under the existing ETS A review clause to address energy price impacts on competitiveness and consumers.

What’s Next?

  • The European Parliament will vote on its negotiating mandate next week. A final compromise will be shaped in trilogue negotiations between the Parliament, Council, and Commission in the coming months.

Bottom line:

The ambition remains high, but the transition path is becoming more pragmatic, with stronger focus on social acceptance and economic resilience.

More

Key Updates in EU Climate Policy

EU environment ministers have adopted a joint negotiating position on the 2040 emissions reduction target, providing more flexibility to member states compared to the European Commission’s earlier proposal.

Main Elements of the Agreement

  •  90% emissions reduction by 2040 compared to 1990 levels. At least 85% to be achieved through domestic measures.Up to 5% through high-quality international carbon credits (pilot phase 2031–2035, full use from 2036). This represents greater flexibility than the European Commission’s initial proposal, which would have allowed only 3% credit use. The Council emphasizes that the target should remain legally binding, while acknowledging variations in competitiveness, social impacts, and national circumstances.

Why does this matter?

Expanding the credit allowance gives industries and member states more room to manage their decarbonization pathways. However, it raises questions about whether this could slow down domestic clean investment efforts.

EU ETS2 Launch Delay: 2027 ➜ 2028

  • Ministers propose delaying the start of the new emissions trading system covering buildings and road transport by one year.

Rationale: Shielding households and small businesses amid ongoing energy price volatility.

Additional points discussed:

  • A slower phase-out of free allowances for heavy industry under the existing ETS A review clause to address energy price impacts on competitiveness and consumers.

What’s Next?

  • The European Parliament will vote on its negotiating mandate next week. A final compromise will be shaped in trilogue negotiations between the Parliament, Council, and Commission in the coming months.

Bottom line:

The ambition remains high, but the transition path is becoming more pragmatic, with stronger focus on social acceptance and economic resilience.

More

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