Sunday, July 14, 2024
HomeElectricityHungary to freeze residential energy bills for the whole year

Hungary to freeze residential energy bills for the whole year

Hungarian households won’t pay more for gas, electricity and district heating until the average consumption throughout the year, said Csaba Lantos, Hungary’s Minister of Energy who spoke about planned investments in Hungary’s renewable capacities, diversification and domestic gas production at a conference on Thursday.

The Hungarian minister underlined that protecting the country’s energy sovereignty is one of the most important goals of Hungary’s energy policy. In addition to ensuring the security, affordability and sustainability of supply, the fourth challenge is the growing demand for energy, pointed out the minister.

As energy prices skyrocketed last year, Hungary was forced to reconsider its price caps that have been in place for almost a decade putting a huge burden on state finances. In July, the government announced scrap caps on gas and electricity prices for households that consume over the average level, but the party maintained the system by shielding those who kept their energy bills under the average consumption level. This mechanism will stay in place in this year as well and the utility costs will remain the same throughout the year for households consuming under the average level, confirmed the minister.

As he pointed out, Hungary imports 75 per cent of its energy, but one of the main objectives of the country is to increase local production. “In the domestic energy mix, natural gas will be reduced, while alternative energy sources will be increased, storage capacities will be expanded, and the infrastructure will be developed to meet the growing demand for electricity,” underlined Mr Lantos.

Although in long-term Hungary plans to rely less on natural gas, the country made several steps recently to increase domestic production. Just this week, the first well at the hydrocarbon deposit discovered in the Sarkad region was put into operation. There are plans to drill a total of 52 wells. The overall goal of Hungary is to increase domestic gas production from 1.5 billion cubic meters to 2 billion cubic meters a year.

Additionally, the minister confirmed that Hungary will build three large combined cycle gas turbine (CCGT) plants of around 500 MW by 2028, one near the Mátra Power Plant and two in Tiszaújváros.

He emphasised the importance of moving forward in diversification announcing that Hungary would like to build the Slovenian interconnector on the gas market, and potentially expand the capacity of already existing interconnectors.

The minister also spoke about the expansion of renewable energy capacities pointing out that Hungary’s domestic electricity consumption was 44 terawatt hours (TWh) in 2021, and according to expectations, this will increase by one and a half times to 68 TWh by 2030.

The minister noted that in January, the total output of solar power plants already exceeded 4 gigawatts, and preparations are currently underway for an additional 5-gigawatt industrial solar park and 100,000 household-sized small power plants. “With this, the total output can reach 10 gigawatts,” the minister pointed out, adding that the country currently consumes an average of 6.5 GW.

Wind energy can finally come in next to solar, as the government announced last week to ease the legislative barriers to building wind turbines. The minister underlined that Hungary will also invest in building up capacities to store the electricity produced from renewables. The government also counts on geothermal energy for heating and power generation, the inaugural session of the Hungarian Geothermal Cluster just took place this week, setting out a five-point plan to tap into Hungary’s vast geothermal energy potential.

At the same time, the Hungarian government also counts on extending the operations of the existing blocks of the Paks nuclear power plant and building the two new reactors in the framework of the Paks 2 investment project.

Regarding the financing of all these investments, the minister said that the government is counting on implementing these investments mainly from the Recovery and Resilience Facility (RRF) II EU credit line.

Sign up for our newsletters

    Monthly newsletter – Delivering the most important energy stories of the month selected by our Editor-in-chief
    Weekly Oil&Gas roundup - All major news about the oil and gas industry, LNG developments, the upscaling of new gases and related EU regulations arriving in your mailbox every Monday.
    Weekly Renewables&Climate roundup - All major news about investments in renewable energy sources, environment protection, green hydrogen and new innovative ways to tackle the climate crisis arriving in your mailbox every Tuesday.

    Most Popular