Hungary: Energy Resources
|Energy Consumption||1.11 Quadrillion Btu|
|2-letter ISO code||HU|
|3-letter ISO code||HUN|
|Numeric ISO code||348|
|UN Region||Eastern Europe|
|Energy Maps||2 view|
|Energy Organizations||1 view|
|Research Institutions||0 view|
|CIA World Factbook, Appendix D|
|Wind Potential||0||Area(km²) Class 3-7 Wind at 50m||119||1990||NREL|
|Coal Reserves||1,829.84||Million Short Tons||23||2008||EIA|
|Natural Gas Reserves||8,098,000,000||Cubic Meters (cu m)||81||2010||CIA World Factbook|
|Oil Reserves||26,570,000||Barrels (bbl)||83||2010||CIA World Factbook|
Policy and Regulatory Overview 
National electrification rate (2000): 99 %
Green Investment Scheme (GIS)As a party to the United Nations Framework Convention on Climate Change and as a state having ratified the Kyoto Protocol, Hungary had sold part of its emission quotas in 2008-2009. Income from the sales is used under the GIS to reduce carbon dioxide emissions and support investments yielding other environmental and social benefits. The GIS replaced the previous National Energy Saving ProgrammeIn 2009, under the GIS programme the following sub-programs were launched: the Climate-friendly Home Panel Sub-programme and the Energy Efficiency Sub-programme. Both are managed by the Energy Centre. EEOP-Environment and Energy Operational Programme The EEOP of the New Hungary Development Plan has a total budget of EUR 4916 M to support Hungarian energy projects falling into two priorities in the period of 2007-2013.Within the scope of the priority axis “Increasing the Use of Renewable Energy Sources”, 5.15% of the total budget can be allocated, while the priority axis “Efficient Energy Use” to promote energy conservation has 1.58% of the total budget. EEOP is funded by the European Union (85%) and the Hungarian government (15%).Revolving Soft Loan – Energy Saving Credit FundThe credit with preferential interest supporting energy savings, increase of EE and the utilization of RES can be requested from the Energy Saving Credit Fund (German coal grant). This credit scheme is operating continuously from 1991 and is available for building societies as well as economic enterprises.Soft Loan – Residential Energy Saving Credit programmeSince 2007 the “For A Successful Hungary” Residential Energy Saving Credit Programme has been offering preferential loans to implement residential projects aimed at improving energy efficiency and the use of renewable energy sources. The preferential loan can be used together with a subsidy from the Energy Saving Program (NEP) or independently and can provide up to 100% of the project costs to eligible applicants.
The New Energy StrategyBy the end of December 2010, The Ministry of National Economy and the Ministry of National Development – with the involvement of experts – have been elaborating Hungary’s new, long-term national energy strategy until 2030. The document will be made available for public consultation by the Government in the first half of 2011.The Government is willing to establish a sustainable energy economy in all aspects, where beside environmental and social sustainability, cost-effectiveness also prevails. In order to reach long-term security of supply and to serve national interest the following areas have to be reached:reduction of import dependencyincrease the role of state regulationstrengthen consumer protectionreduce energy povertydevelopment of related industriesThe main objectives of the strategy are:increase renewable energy utilisationenhance the role of nuclear energydevelopment of regional energy infrastructuredevelopment of new energy institutional frameworkincrease energy efficiency and energy saving.
Total installed electricity capacity (2009): 9172.7 MW-Nuclear: 43%- Gas: 30%- Lignite: 15%- Coal: 3%- Renewables: 7%- Imports; 2%Share of Total Primary Energy Supply* (2009, IEA): 25Mtoe Oil: 27.6%Natural Gas: 37.5%Nuclear: 16.5%Hydro: 0.1%Biofuels and Waste: 7.2%Geothermal/ solar/ wind: 0.5%Coal/ peat: 10.5%*Share of TPES excludes electricity tradeIn the Hungarian generation mix, RES are predominantly biomass (wood) co-fired in conventional thermal power plants. A small amount of wind and biogas generation capacity also exists.The primary energy demand in 2010 is based on:- Gas: 40.6%- Oil: 32.1%- Nuclear: 15.2%- Coal: 10.5%
According to the provisions of the acts creating the Hungarian Energy Office, the Office shall:Issue and amend the licenses for generation, distribution, trade and public utility supply of electricity; for the production of district heat in authorised power plants; the distribution, supply, trade and public utility supply of gas; issue licenses of power plants,Approve the terms of electricity supply (operation, trade and distribution), as well as the business codes of the license holders taking into consideration the opinion of the consumer interest organisations,Approve the restriction lists,Determine the sphere of information to be disclosed,Prepare administrative prices of natural gas, electricity and heat produced in the authorised power plants, and the conditionsInvestigate customer complaints, and protect consumer interests,Operate the Council of Energy Interest Representation,Cooperate in some specific tasks of the Government connected with energy saving,Collect, evaluate and store information about turnover and use of electricity and gas.
The electricity market was characterized by a hybrid model until the end of 2007. This means that a public utility and a free market segment were working parallel. Under the new Electricity Act (which was passed in the summer of 2007), the hybrid model has ceased to exist and a competitive market model has taken its place since 2008. In the latter mode, the competition can be restricted only in the interest of the protection of vulnerable consumers, or with a view to prevent the abuse of market power. Electricity12 generation companies, 10 owned by private investors (Tractebel, RWE, AES, ATES, EdF, Croesus, EON),1 transmission and wholesale company, owned by the state,6 regional distribution/supply companies owned by RWE, EON, EdF.Gas2 generation companies,1 transmission company,1 wholesaler,1 storage company,1 TSO,11 distribution companies/supply companies,3 PB supplier,11 natural gas trader, cross-border traders.The full liberalization of the electricity market, which has been in force since 1 January 2008, required the development of a new operational model, a new act and the secondary rules to ensure its enforcement. All of these requirements were fulfilled in 2007.
Between 1998 and 2005, the energy efficiency index (ODEX) improved by 8%, against 9% for the EU-27. Significant part of the efficiency improvement resulted from energy efficiency measures in the industrial sector, since the energy efficiency of households and transport sector remained quite stable.Primary energy intensity in Hungary is below the European average.IndustryManufacturing efficiency improvements of 7%/year from 1998-2009, through shifting towards less energy-intensive sub-sectorsCHP installation (including FITs) and fuel switching programs.Soft loans facilities for EE to support SME.Utilities4% improvement in electricity sector efficiency from 1990-2009, due to increased use of CCGT, and improved thermal plant efficiency.9% reduction in T&D losses since 1993.10.9% share of renewable energies in total electricity production by 2020.FITs for electricity generation. PV, wind, biomass, biogas, small hydro and CHP.TransportODEX decrease of 9.5% from 1998-2009.Financial incentives for modernisation of the private car fleet, including environmentally-graded road tax.Combined road-rail transportation.ResidentialSubsidies for efficiency improvements of up to 25%, target up to 95 TJ savings per annum.Geothermal/biomass energy use in district heating.?EE renovation of pre-fab flats.District Heating Law: Cessation of flat-rate tariff.PublicProposals for wide-ranging improvements in efficiency in public buildings and municipalities, and market creation for public sector energy services.
MVM RT owns the transmission network (grid). About 63% of this network (lines and substations) are over 25 years old so upgrading work is to be done continuously.Hungary’s energy infrastructure pattern bears the typical characteristics of most other Eastern European countries. Its main energy supply infrastructure was built during the Socialist era, leaving Hungary dependent on energy supplies from the East, now from post-Soviet states.
The government set up the National Development Agency by merging the National Development Office and authorities managing the implementation of the National Development Plan, in order to support the efficient use of European Union funding. A fund of EUR 22.4 billion (around HUF 1000 billion) is going to be invested in developing the country and closing the development gap during 2007-2013. The agency is responsible of implementing the New Hungary Development Plan, which was approved by the European Commission in May 2007. It acts as the Managing Authority in the Operational Programmes. One of the OP’s is focusing directly on RE, EE and other environmental related tenders, called the Environment and Energy Operational Programme. The Energy Efficiency, Environment and Energy Information Agency is the legal successor to the Energy Centre (formerly the EU-Hungarian Energy Centre) and the Energy Information Agency. The non-profit limited company is owned by the Ministry of National Development.The Energy Centre manages most of the statistical issues related to energy, manages subsidies and loans for EE and RES, and prepares documents for the government concerning EE and RES, and carries out the energy agency activities. The staff of the Centre was considerably increased since 2002 (20 staff members) and amounts to 70 staff members in 2011. Main sources of financing are separated budget lines of the founder and operational costs of projects along with other market activities.The Hungarian Association of Renewable Energy Resources represents all actors within the renewable energy sector and takes an active part in the control of the policy making processes. Established in 2005, it has been actively involved in the development of the Hungarian RE sector.The Hungarian Biomass Association (HBA) is a non-profit organisation supporting the dissemination of biomass technologies.
MVM, the former state monopoly, is Hungary’s main electricity wholesale trader, and it also has a substantial share in the electricity retail market. Long-term Power Purchase and Sale Agreements have a key role in keeping its position as a market leader.The MVM Group is the major generator, owning the Paks Nuclear Power Plant. In addition to ensuring the balance of the system and the security of supply, commercial considerations are given priority in the expansion of the generation portfolio. The function of the TSO is carried out by MAVIR Rt. The operations of the TSO will be governed by strict functional unbundling rules.In addition to Hungary, MVM Group is an investor in the electricity markets of other countries of the Region.The MVM Group has responsibilities related to ensuring the security of supply and to achieve long-term national energy policy. This includes generation projects to ensure the security of supply.Distribution is handled by 3 foreign companies, RWE (44%), Eon (34%), and EDF (22%).
Degree of independence
The HEO is a national public administration body with independent powers and competence, acting under Government control and under the supervision of the Ministry of National Development.
Energy Polices of IEA Countries. Hungary 2006 Review http://www.iea.org/textbase/nppdf/free/2006/hungary2006.pdf Hungarian Energy Office. Report on the activities of the Hungarian Energy Office in 2007 http://www.eh.gov.hu/gcpdocs/200812/report2007i.pdf
In 2008, the government approved the Renewable Energy Strategy for 2007-2020. The policy targets the increase of RES production to 15% by 2020. The strategy will favour decentralized energy production, the cogeneration of heat and power and the establishment of small power stations utilizing renewable sources locally. The strategy forecasts a substantial amount of new investments by 2020, in the field of biomass, wind, solar and geothermal energy. Electricity generation from RES will grow faster than heat generation.The Operational Program for Environment and Energy associating with the New Hungary Development Program for the period 2007 to 2013 and approved also by the European Commission indicates a close relationship between energy saving, energy efficiency enhancing, and environmental protection.Renewable Energy Action Plan (REAP)After a long stakeholder consultation process, the Hungarian Government approved the Hungarian Renewable Energy Consumption Action Plan in December 2010 and has submitted it to the European Commission.The approved 2009/28/EC directive on RE sets binding targets on the share of RE in gross final energy consumption. In the EU the target is 20% by 2020 and Hungary has to reach 13%. However the Government set an even more ambitious target to reach 14.65% (120.56PJ).In addition to promoting the realisation of energy and climate change policy objectives, the measures specified in the Action Plan serve the Hungarian economic development, improvements in its competitiveness, job creation and sustainable rural development. This is done by boosting the green economy and also by applying and spreading the use of renewable energy sources, which consequently may become a breakthrough point for the Hungarian economy.The document states that the key areas of Hungary’s renewable energy policy are the following:security of supplyenvironmental sustainability, climate protectionagriculture and rural developmentgreen economy developmentcontribution to EU targets.The National Energy Efficiency Action Plan (NEEAP)The energy efficiency plan, as part of the Hungarian National Energy Policy, is in favour of supporting energy efficient and environmentally-friendly buildings, equipments, technologies and modes of transport for the public, policy makers as well as for market actors.The aim of the action plan is to set targets on efficient energy use in Hungary for the 2008-2016 period. It determines the detailed national targets regarding reduction of final energy consumption by 1% per year (Directive 2006/32/EC of the European Parliament and the European Council), and - according to calculations - reduction of 57.4 PJ/year (15970 GWh/year) by 2016, in those sectors and industries which are not covered by the EU emission trading scheme.These actions are in line with the national objectives of climate protection. In Feb 2008 the first version of the Action Plan was adopted by Parliament 2019/2008 (II.23) Gov. Decree. Since then the Action Plan has been revised and the modified National Energy Efficiency Action Plan was approved by 1076/2010. (III. 31.) Gov. Decree.
Hungary has a high share of primary energy imports. At present, Hungary imports around 80% of its oil requirements. Its import dependence for gas is equally important. Although a bulk of crude oil imports came from Russia, the Friendship (Druzhba) oil pipeline has a design capacity for reverse flows from the Adriatic Sea (West-East) that can ship oil from a Croatian port to Hungary.Although Hungary’s installed power generation capacity can theoretically meet its demand, the country has imported around 10% on average of its electricity needs over the last decade. Due to production related costs it has been cheaper to import electricity than to produce it domestically. This highlights the fact that Hungary has few adequate domestic generation capacity reserves.In 2009 Hungary imported 10,972GWh in total out of which 6,001GWh was coming from Slovakia (55%) 2,906GWh from Ukraine (26%) , 1,392GWh from Austria (13%), 586GWh from Romania (5%), 75GWh from Serbia (0.7%) and 12GWh from Croatia (0.1%). During the same year, Hungarian exports totalled 5.459GWh so the import-export balance totaled 5,513GWh (Croatia imported 3,309GWh, Austria: 238GWh, Serbia 1364GWh, Romania: 308GWh, Ukraine: 240GWh from Hungary).
Role of the government
The Ministry of National Development (www.nfgm.gov.hu) has taken over the tasks and responsibilities of the former Ministry of Transport, Telecommunication and Energy in July 2010. (www.khem.gov.hu). A separate State Secretariat within the Ministry is dedicated for Climate and Energy. The work of the Secretary of State is supported by two deputies; one is responsible for “traditional” energy sources and the other one for green-economy development and climate. An additional State Secretariat is dealing with transportation issues within the Ministry. Under the supervision of the Minister, the State Secretary of Climate and Energy is responsible for the development of a long-term energy strategy, a renewable energy strategy, a strategy of climate policy, a strategy of biofuel and other renewable fuel for transport. The strategies must also be supported by action plans, policy making procedures and legislation. The Secretary is also entitled to establish programs for energy efficiency improvement of buildings and is responsible to ensure sustainable economic development.The Ministry of Rural Development was formed after the merger of the former Ministry of Environment and Water and the Ministry of Agriculture and Rural Development in July 2010, overtaking all the responsibilities and tasks of the two previous main public authorities.At present, the Ministry is a central governing body for environment and nature protection, water affairs, agriculture, rural development, game management and fisheries, the food sector, forest management and forest conservation. The Ministry’s responsibilities include policy development, tasks connected to governmental work, and associated research and development. The Minister has to cooperate with the Minister of National Development regarding climate protection policy-development.
The Hungarian Parliament approved the new Act on Electricity in 2007, which came into effect in 2008. The Parliament adopted the Act with a view to setting up an efficient internal electricity market, to promote energy efficiency and energy conservation within the framework of sustainable development, to provide consumers with a secure and reliable supply of electricity of a specified quality at transparent prices, to integrate the Hungarian electricity market into the converging electricity markets of the European Communities, compliance with the legislation of the European Communities, and to develop an objective and transparent regulatory regime in compliance with the principle of equal treatment.In addition, the Act seeks to encourage the development of renewable sources of energy as well as cogeneration, by establishing purchasing obligations and introducing feed-in tariffs . These feed-in tariffs were introduced on the 1st January 2003. According to the Regulation Nr. 105/2003. (XII.29.) GKM, electricity suppliers are obliged to purchase from producers utilising renewable energy sources, with an installed capacity of more than 100kW. Individual arrangements in the case of smaller plants are also possible. The tariffs range from 27.06 HUF/kWh for solar, wind et al, to 34.61 HUF/kWh for combined heat and power systemsOther relevant legislation in Hungary includes:Government decree No 389/2007. (XII 23.) on Obligatory off-take and purchase price of electricity generated from waste or from renewable energy sources, or by CHPG.40/2008 Parliamentary Decree on the national Energy Strategy 2008-2020 (IV.17.).An obligatory off-take and feed-in tariff system is present in Hungary for electricity generation from RES. This regulation contains the actual tariffs.There are fixed feed-in tariffs (since January 2003, amended in 2005) combined with purchase obligation and grants. The support is granted for the payback period of the facility.In June 2010, parliament reinstated the old system of government-set electricity and gas prices for households, in effect potentially making this market segment unattractive for would-be competitors.
The legal and institutional framework in the energy industry is still developing. There are numerous organisations existing to regulate specific sectors of the energy market, which will lead to inefficiencies and a lack of synergy between departmental policy and the national energy policy.
The Hungarian Energy Office (HEO) was established in 1994, originating from Act on Natural Gas Supply (Act XLI of 1994) and the current Electricity Act CX of 2001 amended in 2005. The Act 57 of 2006 on the central administrative bodies, and the legal status of the members of the government, and of the secretaries of state defined that the Office is a governmental office, controlled by the Government and supervised by the Minister responsible for the energy sector who is appointed by the Prime Minister. The HEO regulates and supervises energy activities of gas and electricity companies. It implements government policies on sustainable energy development in line with EU Directives .
In 2007, the electricity generated from renewable sources increased in comparison with the year before, and almost reached the 1852 GWh maximum output, as in 2005 (before regulation by allowances). The amount of power generated from biomass increased in comparison with the year before.Targets for 2010 were 2,630 GWh (5.8%) in electricity, and in all renewable energy carriers 93 PJ (8.2%).Targets for 2013 for electricity from renewables are 5,400 GWh (11.4%), in all renewable energy carriers 168PJ (14%).Biomass energyThe biggest renewable energy sector is biomass, thanks to geographical and other natural conditions that make Hungarian land very favourable for agricultural use. Total primary biomass production is 54 million tons. At this time only a small proportion of the potential is used.Wind energyProspects for wind energy in Hungary are good, however, with close geographic ties to the largest Austrian wind farm, as well as implied hub-height wind-speed of 6.7 m/s at the currently-installed wind farm near Budapest.Electricity generated from wind energy was 331 GWh in 2009, accounting for 12.4% within the renewable energy mix. Geothermal energy-Hungary has the most significant reserve of geothermal resources among the Eastern European countries.-The current utilisation is mainly thermal water (835 thermal well in operation with an output of 100 million m3), for agricultural use and for district heating.Hydroelectric powerWhile the country is crossed by many rivers, it is a relatively flat country with moderate hydro resources. The existing total installed capacity was 46 MW in 2008.There are 31 hydro power generators in Hungary –by far the largest of which are the Kiskore and Tiszalok units on the Tisza River in the eastern part of Hungary, owned by the state through Tiszaviz Hydro Power Plants Ltd., with capacities of 28 MW and 11 MW respectively.The country’s technical hydro power potential is around 8,000 GWh, as the second river in Europe, The River Danube, bears a great deal of this potential (72%).Solar energy-Solar applications are not widespread. Solar energy investments are mainly targeted to solar collectors for water and space heating.-The estimation for the next 10 years is 35 MWh conventional energy saving per year - from the projected installation of 100,000 m2 solar collectors - with an average 350 kWh/m2 annual energy output.
- Hungary-Joint Programme on Resource Efficient and Cleaner Production (RECP) in Developing and Transition Countries
- Hungary-Employment Impacts of a Large-Scale Deep Building Retrofit Programme
- USAID Europe and Eurasia Climate Program
- Action Plan for Forest Law Enforcement Governance and Trade (FLEGT)
- Ecofys-Country Fact Sheets
- UNFCCC-Global Map-Annex 1
- OECD Input-Output Tables
- Greenhouse Gas Emission Trends and Projections in Europe 2009
- Carbon Dioxide Information Analysis Center (CDIAC)-Fossil Fuel CO2 Emissions
0 Research Institutions