Wednesday, November 30, 2022
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Looking to the Future of US-Hungarian Energy Cooperation

The United States and Hungary have a long history of cooperation on energy issues – from Standard Oil’s work with Hungarian companies in the early 20th century to cooperation on renewable technology like the 2019 Solar Decathlon hosted in Szentendre last summer.

And as the Hungarian government’s recently-released 2030 Energy Strategy looks to the future, we see several more opportunities for cooperation. On renewables and energy storage, we hope that Hungary will look to the United States for best practices on integrating these new technologies into its energy mix. On gas, we urge Hungary to diversify its sources for the sake of energy security, and we believe US companies can continue to help Hungary expand its own domestic production. Finally, we encourage Hungary to consider the exciting new possibilities of small modular reactors (SMRs) – a technology that would be a natural fit in light of Hungary’s long experience with nuclear energy and desire to reduce carbon emissions. Allow me to share more about how we can cooperate on all of these efforts. 

The Hungarian government has laid out an ambitious plan for Hungary’s transition to a low-carbon future, with a particular focus on solar power. We applaud this comprehensive approach, and the United States’ own “all of the above” energy strategy means that our governmental and commercial leaders have a wealth of experience to share with allies like Hungary. The United States and Hungary are already working together under the Partnership for Transatlantic Energy Cooperation (P-TEC), a framework which can enhance our cooperation as Hungary begins many of these renewable projects. We encourage Hungary to use this transformation as an opportunity to increase its energy security – something renewables naturally do by eliminating a fuel supply chain. And with these important projects, Hungary should maintain a competitive, transparent bidding process. Such competition is what will allow innovative companies to help transform Hungary’s energy sector and ultimately bring down costs for consumers. 

Hungary’s strategy rightly identifies one of the key priorities for the next decade – diversifying sources for natural gas. Hungary’s near-total dependence on Russian gas leaves a NATO ally vulnerable to Russia’s malign influence. As Ambassador Cornstein told the Hungarian Parliament in 2018, “when you are dependent on Russian gas, you aren’t just paying with dollars per bcm. There are also costs for your independence and your security as well.”

We urge Hungary to continue to support European and regional energy cooperation to bolster energy security through diversified sources of natural gas. Two important projects for diversifying European gas supplies include the Krk LNG terminal and development of the Neptun Deep offshore gas field in the Black Seas. Krk LNG would allow Hungary to have access to the international gas market and we think that the price of LNG will only become more competitive. We hope to see the first shipments of gas from this terminal to Hungary when it opens in 2021. Hungary’s revitalised domestic production of gas also offers an opportunity to strengthen energy security and is one of the greatest examples of US-Hungarian energy cooperation. US companies will no doubt continue to play an important role in Hungary’s gas production. 

One technology that is not mentioned in Hungary’s recent energy strategy is that of small modular reactors (SMRs). Several US companies are working on this technology, which promises to combine nuclear energy’s low-carbon, consistent energy with lower production costs and quicker rollout. The constant, uninterruptible power from SMRs complements renewable energy sources, which often produce intermittent energy depending on the weather. Hungary has a long history of working with nuclear technology and would be an ideal country to benefit from this innovation. Already in this region, Czech, Romanian and Polish energy companies have signed memorandums of understanding with US firms working on this technology and we would encourage Hungarian companies to do the same.   

The future of energy in Hungary is exciting and the 2030 Energy Strategy shows how large the transformation in this sector can be. The United States remains a committed partner in Hungary’s energy transformation – a transformation that we hope increases the security and prosperity of both our countries. 

Photo: official Facebook page of the US embassy Budapest.

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