The aim of this report is to assist Hungarian policy makers in setting up cross-border auction(s) with prospective partners considering the most important aspects to take into consideration in their design and the factors influencing the outcomes, through a hypothetical cooperation with Slovakia. The study builds on the AURES case study D6.1 on the design options for cross-border auctions (Bl├╝cher et al. 2019).

The structure of the paper is as follows. Chapter 2 describes the basic types of cross-border auctions, the rationale behind setting up such partnerships and the expected outcomes. Chapter 3 provides a brief overview of the Hungarian electricity sector and the state of renewable electricity deployment, also touching upon the current developments in renewable support policy and the relevant regulatory framework behind cross-border auctions. Chapter 4 explores the considerations of the government in framing a cross-border cooperation and the implications of current energy policy priorities, including the potential types of relationship and the factors influencing the selection of partner countries. Chapter 5 presents the results ofGreen-X modelling that quantifies the expected effects of cooperation with various prospective partners on the RES-E generation mix and the level of support costs in the participating countries. Chapter 6 assesses the factors playing a role in a cooperation with the candidate partner countries. Chapter 7 examines how the tender design elements would be adapted to the cross-border relationship with Slovakia, the hypothetical partner country selected. Chapter 8 reviews the aspects to be considered in setting up the cooperation agreement. The last section provides a summary.

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