implementing the energy [r]evolution

This section examines the energy sector in Hungary, however, it is not the aim of the chapter to give a thorough and detailed analysis. It provides a brief overview of the main characteristics of the energy system and the currently used sources of energy in Hungary. It then presents the key players in the energy system, with particular focus on the electricity market and takes a look at some of the current energy policy making in the country. At the end of the chapter the main issues and challenges will be briefly touched upon.

2.1 introduction

More than 20 years have passed since the regime change in Hungary. Throughout these years the economy has gone through fundamental structural changes, which also meant a huge change in people’s lives. Much of the country’s former heavy industry was ramped down and there was a significant increase in the rate of unemployment. The mining industry declined, and energy demand has significantly dropped, after which it started its gradual, yet slow increase in 1992. Due to the economic crisis in 2009, another singificant drop (7.6%) in the consumption of primary energy happened, while in 2010 this number was 1085 PJ.

In the coming years, we have the chance to sustainably transform our energy economy to adjust to the trends already happening in the world and in the European Union by focusing on the exploitation of our massive energy efficiency potential and on harvesting our renewable energy sources. For this, an Energy [R]evolution must happen, as for the moment, Hungary still relies mostly on nuclear and fossil energies.

2.2 energy sources

Fossil fuels The mining industry used to be quite significant in Hungary, however, since the nineteen sixties, the exploited amount of domestic coal and lignite has been going through a gradual decrease. According to the Hungarian Mining and Geological Bureau the total amount of exploitable coal and lignite accounts for about 8.5-10 billion tons (mostly lignite), only a fraction of which is actually being extracted today.

Natural gas to some extent is also available in the country; however, the technological conditions are not in place for it to be exploited. And this brings us to a crucial point. If we look at the primary energy sources in Hungary, the import of natural gas has shown a significant increase in the last 20 years, 80% of which comes from Russia on one single pipeline. Even with the significant gas storage capacities available, this exposes Hungary to serious defencelessness and dependence on Russia which means a huge threat to our energy security. When it comes to oil, the situation is similar as with natural gas: most of it, over 80% needs to be imported.

Although not a fossil fuel, it is worth to mention that domestic uranium mining has also played a part earlier, but since the exploitation was not economical, the production was ceased in 1997.

Nuclear energy Hungary has one nuclear power plant with four operating VVER-440/213 reactors and an output of 2000 MW capacity. It plays a significant role in the electricity supply; in 2010 42% of the country’s electricity generation was covered by this type of energy. The reactors of Paks Nuclear Power Plant were built in the eighties and are based on Russian technology. They are close to reaching their end of lifetime (30 years), however, the Parliament has taken note of the lifetime extension plans in 2005, which would give the reactors an additional 20 years to operate (the last one until 2037). In 2009, the Parliament also indorsed plans about the preparation of additional new reactors on the site of Paks.

Renewable energy The renewable energy production for the moment in Hungary is very low, at present renewables mean 7% of the country’s electricity (2010).8 However, most of that comes from biomass burnt in retrofitted coal plants with very low efficiency, and this is not sustainable. There is some wind (~300 MW) and some small hydro capacity (55 MW) in the system, but the rest is negligible. Currently, the necessary conditions are not in place for the large uptake of renewables to be possible in the Hungarian energy system. Neither the support scheme, nor the highly burocratic permitting procedure allows for what would be needed for an Energy [R]evolution to take place. Nevertheless, Hungary has great potential in solar, geothermal and wind energy, and to some extent, bioenergy could also be used (until sustainability limits are reached).