The net-zero carbon grid is an electricity system that accommodates high shares of variable, distributed resources, and ensures the delivery of reliable and affordable energy to consumers without the use of fossil fuels. The UK experience with these grids can provide valuable examples of best practices that could be adopted by Hungary to help overcome its own implementation challenges and make progress towards the wider goal of grid decarbonisation. The main insights are the following:

• Achieving a net-zero electricity grid requires entirely rethinking the energy system from today; rather than nuclear, coal or gas baseload complemented by renewable sources, renewables will be the standard to which all other sources must adapt to ensure system stability.
• Implementing a net-zero power grid involves several technical challenges both at the transmission and the distribution system level which require the combination of innovative technological solutions and markets through which they can be procured efficiently, that in turn provide efficient investment and dispatch signals.
• Transmission and distribution system operators will have to cooperate actively to develop well- defined rules and procedures for planning, forecasting, data sharing, connecting distributed energy resources and sharing flexibility services.
• It is critical that system operators are motivated by forward-looking remuneration and incentive models to cover high-cost upgrades and spur innovation in addition to available national and EU support.
• Tariff systems that guide the behaviour and choices of system users are essential to ensure that the transformation of the electricity system happens at the least cost, for example, limiting costly system upgrades to the minimum through locational pricing or ensuring returns to investments via tariffs that help time-shifting consumption.

The policy brief was prepared as part of the Knowledge Sharing Project between the United Kingdom and Hungary to Enhance Energy Security. It includes two on-line workshops organized by the British Embassy Budapest and REKK. The first workshop, focusing on the Road to Zero-Carbon Grids was organized on 23 February, 2023.