Hungary plans renewable energy push to curb prices and import needs

Hungary Plans Major Renewable Energy Shift to Cut Prices and Imports

By Gergely Szakacs

Hungary's Renewable Energy Strategy and Economic Impact

BUDAPEST, Oct 8 (Reuters) - Hungarian Prime Minister Peter Magyar's government plans a major drive into renewable energy to curb high import needs and lower electricity prices for companies, a top energy official said on Thursday.

Wind Power Expansion and Policy Shift

As a first step, Magyar's cabinet launched a tender in August to build 700 MW of wind turbines, aiming to boost wind power capacity to 4 GW by 2030, a more than 10-fold increase and a major shift from former leader Viktor Orban's policies. 

Reducing Corporate Energy Costs

"One of the main aims of the entire strategy is to make corporate energy supplies, which are currently exceptionally expensive even by European standards, cheaper. This will not happen from one year to the next," Energy Affairs State Secretary Andras Totth said.

Solar and Wind Power Growth Targets

In addition to the nearly 9 GW of solar power built up in past years, which was the favoured renewable energy source under Orban, Totth said the country could boost wind power capacity to more than 6 GW by 2040 to curb power prices and import needs.

Hungary’s Energy Import Dependence

Hungary imports more than 80% of its fuel needs, including nuclear, oil and natural gas, a dependence that S&P Global described as a key vulnerability when it affirmed the country's credit rating at BBB-minus with a negative outlook in May.

Geopolitical Risks and Economic Disadvantages

"We are entirely exposed to geopolitical shocks. Therefore, the Hungarian energy system is a competitive disadvantage for the Hungarian economy," Totth told a conference organised by financial news website portfolio.hu.

Political Changes and EU Funding

Magyar ousted Orban from power after 16 years in April on a pro-European Union turn, securing the release of billions of euros worth of suspended EU funding, part of which will go into investments to shore up Hungary's energy infrastructure.

Debate Over Energy Sovereignty

"In the past more than 10 years, we have heard much about energy sovereignty, which essentially does not exist," Totth said.

Energy System Vulnerabilities and Nuclear Power

Impact of Drought on Nuclear Power

He said a severe drought, which pushed Hungary's only nuclear power plant in Paks to the brink of shutdown in August following a plunge in water levels on the Danube River, has exposed the vulnerabilities of the country's energy system.

Reliance on Imports During Crisis

"There were days when only imports kept Hungary alive every minute of the day," Totth said. Even so, the lifetime extension of the 2 GW Russian-made plant would be a "critical project."

Future of Nuclear Energy Projects

"At present, it is the cheapest conventional project we can carry out, and it will be a priority in the future," he said.

(Reporting by Gergely Szakacs; Editing by Emelia Sithole-Matarise)