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Solar and gas to drive Mátra Power Plant’s low carbon future

The management of Hungary’s Mátra Power Plant, a major provider of electricity revealed plans to transform the coal-fired power plant to become an innovative, renewables-based pillar of the country’s electricity generation. Plans include installing solar parks with a combined capacity of 420 megawatts (MW) at its lignite mines and adding a 500 MW gas-fueled combined cycle gas turbine (CCGT), complemented with communal waste-to-energy technology.

“The technological transformation of the Mátra Power Plant in line with climate protection aspects is of national strategic interest,” said Zoltán Orosz, the plantʼs head of strategy. He explained that phasing-out the plant’s lignite units can only be achieved if they are replaced by more modern and environmentally friendly technologies, which is vital to achieve the national decarbonisation targets and to reduce polluting emissions.

Mátra Power Plant with a total capacity of 950 MW, is the second-largest power plant in Hungary – after Paks Nuclear Power Plant – providing for up to 14 per cent of the country’s electricity production. The plant has five lignite-fired units were built in the late 1960 and two gas turbines built in the mid-2000s, followed by the installation of two solar parks on the on top of a retired coal ash landfill with a combined capacity of 36 MW capacity.

Last year, Mátra Power Plant generated about 4,500 gigawatt-hours of electricity from burning lignite coming from its two open-pit mines in Visonta and Bükkábrány, complemented with solar energy, firing biomass refuse-derived fuels (RDF) as well as gas fuel. The plantʼs existing blocks have permits to operate until the end of 2025.

However, according to Hungarian newspaper Népszava, Mátra Power Plant has already received a preliminary permit from the Hungarian Energy and Public Utilities Regulatory Authority for the operation of its third, 220 MW lignite-fired unit after 2025, although this year is Hungary’s self-declared deadline to phase-out coal. In its Climate and Environmental Protection Action Plan the government clearly states that it wishes to gradually phase-out the Mátra Power Plant’s lignite-burning units in the next five years.

The new owner of Mátra Power Plant, state-owned energy group MVM stated before its intentions to transform the now obsolete and inefficient energy production site into a modern, carbon-efficient system.

The mentioned alternative solutions for the transformation of the power plant – solar capacity, gas solution and waste-to-energy – were already aired before without specific numbers. In an interview with CEENERGYNEWS László Szabó, Director of the Regional Centre for Energy Policy Research (REKK) warned that “before committing to any of these technologies the plant management should carry out a thorough assessment of economic viability factoring in the evolution of the electricity market in light of the continued increase of carbon prices, expected growth in installed solar capacities and strategic considerations of imported volumes.”

Record high carbon prices create a strong economic incentive for the decarbonisation of high-emitting sectors, such as the coal industry. The pandemic didn’t change this trend, in June EU carbon allowance prices rallied to a three-month high and experts believe that the next emission trading period has serious potential to drive the carbon prices higher, contributing to shifting power-sector fuel economics away from lignite and coal.

However, decommissioning of coal technology and the transition towards more sustainable modes of power generation pose big challenges to countries and regions whose economies are heavily reliant on coal production.

Therefore, the European Commission has recently launched the Just Transition Platform (JTP), a tool to help Member States to draw up their territorial Just Transition Plans and access funding from the over 150 billion euros Just Transition Mechanism. This online Platform will provide technical and advisory support for public and private stakeholders in coal and other carbon-intensive regions.

Hungary is counting on EU support and subsidies to cover part of the restructuring costs of the Mátra Power Plant. Under the current scenario, Hungary would receive 543 million euros from the entire 150 billion euros budget of the Just Transition Fund which was increased significantly by the Commission to guarantee a sustainable, even, inclusive and fair post-coronavirus recovery.

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