Hungary Accelerates Green Energy Transition
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In recent years, Hungary has made significant strides towards a green economic transition, actively pushing for increased renewable energy usageThe Hungarian government has set an ambitious target to raise the share of renewable energy in its energy consumption from 21% to 29% by the year 2030, spearheading initiatives across various sectors to promote adjustments in energy and economic structuresThis proactive approach reflects a broader commitment to sustainability, positioning Hungary as a leader in green energy efforts in Central and Eastern Europe.
One of the cornerstones of Hungary’s strategy is the sustainable management of its water resourcesThe country’s freshwater comes from multiple sources: 35% from groundwater, 35% from river water, 25% from karst cave water, and the remaining 5% from surface waterTo secure its water resources, Hungary has shifted its focus in the water sector from disaster prevention to sustainable management
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Over the past decade, the government has invested over a trillion forints in water resources, ensuring that nearly every household has access to clean drinking water with a wastewater treatment rate exceeding 80%, a leading figure in the regionFurthermore, plans are in place to reduce reliance on groundwater extraction and enhance groundwater management to prevent pollutionA staggering investment of approximately 200 billion forints (about 40 million USD) is slated for 2024 to update and build water stations along the Danube River, utilizing new technologies to increase the efficiency of production equipment while conserving water.
Simultaneously, Hungary is amplifying its solar power installations to enhance the supply of green energyBy the first half of 2024, the total capacity of solar power plants, both industrial-scale and residential, was over 6000 megawattsThe Hungarian Ministry of Energy reported that in the past two years alone, solar capacity increased by over 1 gigawatt, propelling Hungary ahead of many other nations in solar energy development
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From 2010 to 2022, solar capacity surged from 2 megawatts to an impressive 4235 megawattsWith vigorous growth in recent years, Hungary achieved a total installed capacity of 6 gigawatts by spring 2024, realizing its 2030 goal six years ahead of scheduleAs part of the revised National Energy and Climate Plan, the target for installed solar capacity is now set to double to 12 gigawatts by 2024.
Nuclear energy currently constitutes half of Hungary's total electricity generation, and the country aims to further amplify its share of green energy while significantly expanding its energy storage capabilitiesA key initiative, the "Solar+” program, is being implemented this year, with a funding of 230 billion forints aimed at providing households with 5 million forints to purchase solar panels and storage equipmentThis initiative is expected to cover over two-thirds of the investment costs for more than 25,000 households, bolstering self-sufficiency in electricity and relieving the burden of energy costs
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Presently, there are over 270,000 household-scale solar power systems in operation, and the "Solar+" program is projected to increase this number by an additional 10%.
Hungary is also leveraging its geographical advantages to develop geothermal energy efficientlyNestled within the Carpathian Basin, the country has a shallower crust compared to the European average, allowing for the effective use of geothermal energyHungary ranks among the top five European countries for direct utilization of geothermal energyThe national geothermal strategy, which outlines an increase in the share of geothermal energy in overall thermal supply from about 6.5% to 25-30% by 2035, aims to replace 1 to 1.2 billion cubic meters of natural gas, thereby reducing gas imports and enhancing energy securityWith 165 billion forints earmarked for governmental financial support, Hungary is incentivizing geothermal resource development through subsidies targeting geological exploration and creating favorable financing environments
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The government also encourages public institutions to adopt geothermal solutions for district heating and promotes the installation of geothermal heat pumps.
Since 2010, the flexible licensing system, the formation of geothermal clusters, and national geothermal encouragement programs have greatly advanced the industry, resulting in a quadrupling of geothermal energy production within Hungary, though there remains vast potential for expansion.
Furthermore, the Hungarian government is implementing a home renovation subsidy program aimed at achieving energy savings and reducing energy consumptionThis initiative, which amounts to a total of 108 billion forints, simplifies application procedures for homeowners, providing financial support for the modernization of properties built before December 31, 1990. This includes incorporating air-source and water-source heat pumps in heating systems and deploying new high-performance insulation materials, aiming for an energy savings target of at least 30% per renovated property
Recently, more than 6,300 energy certificates have been issued for eligible residential properties.
To foster electric vehicle adoption, the Hungarian government is also expanding the charging infrastructure in remote areas as part of its national recovery planThis initiative specifically supports the electric vehicle industry by providing the essential infrastructure needed for zero-emission transport to expedite the energy transitionUnder this plan, companies with operational permits for charging stations can apply for favorable loans of 100 million to 6 billion forints, upon committing to establish at least one electric vehicle charging station in areas with few charging optionsAn additional 28 billion forints in subsidies are allocated to support the establishment of over 100 new public charging stations outside of Budapest, particularly those outfitted with solar panels and storage systems.
The government prioritizes the development of charging networks, especially for stations equipped with energy storage or renewable energy generation devices, located along the Trans-European Transport Network (TEN-T) or suitable for heavy vehicle charging
There are also stipulations to ensure that all new or expanded charging stations have smart charging capabilities and accept electronic payments.
Although Hungary's comprehensive measures facilitate a faster transition to a green economy, certain critical relationships remain pivotal challenges to economic greening that must be addressedThe first involves addressing the discord between unification and individual approachesFor instance, according to EU policies, the share of solar and geothermal energy in the energy structure should be tripled to meet the joint energy and climate targets, yet implementation varies among member states, maintaining over 60% reliance on primary energy sourcesGeothermal energy, in particular, has not been fully harnessed across Europe, with utilization rates below 1%. To enhance geothermal development, Hungary needs EU funding support.
The second challenge lies in generating power while ensuring proper energy storage solutions
Solar energy generation depends heavily on sunlight, resulting in high output during sunny periods and insufficient supply during nighttimeTo address this volatility, establishing pumped-storage hydroelectric power plants has become a common international solutionHungary is actively pursuing increased solar energy development while simultaneously prioritizing the construction of such energy storage facilities to achieve a balance between production and storage of green energy.
Lastly, the relationship between production and recycling poses challenges, particularly regarding the production of power batteriesHungary has become a frontrunner in battery manufacturing, with substantial production capacity established domestically, contributing over 5% of GDP from battery exportsHowever, the recycling and reclaiming of valuable raw materials remain industries that need development across Europe
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