BUDAPEST – Hungary took a major step in the right direction with its National Energy Strategy to 2030, which was published in 2011. The country must now make greater use of market-based mechanisms in the energy sector to meet its goals, according to the International Energy Agency’s latest assessment of Hungary’s energy policies.
The main objective of Hungary’s energy strategy is to ensure a sustainable and secure energy sector while supporting the competitiveness of the economy. The IEA encourages the government to develop appropriate mechanisms to make sure Hungary can deliver on its ambitious goals.
“We applaud Hungary’s achievements in reducing the carbon intensity of its economy, building energy infrastructure and strengthening energy security, most notably via gas storage,” said Dr Fatih Birol, the IEA’s Executive Director. “Hungary has made progress in diversifying its energy supplies and increasing competition in the energy sector, but there is still more to do on both fronts.”
Energy-related carbon dioxide emissions remain well below their 2008 levels despite the healthy recovery of industrial output. Still, the IEA encourages the government to adopt more ambitious targets for emission reductions. The IEA report also welcomes the government's efforts to strengthen energy security and commends its large investments in oil, electricity and natural gas infrastructure. Additional infrastructure investments are expected, most notably the construction of two new nuclear power generating units.
The IEA report highlights Hungary’s success in developing wholesale markets for gas and electricity and emphasises that undistorted energy prices enable markets to work efficiently and strengthen energy security. It recommends the development of a programme for the gradual implementation of full retail market liberalisation, while continuing to protect vulnerable consumers.
While renewable energy production in Hungary has increased significantly in the last decade, its growth has slowed in recent years. Recent reforms and the introduction of a new support system for electricity from renewable sources could arrest this slowdown. The IEA encourages the government to also emphasize other renewable energy sources such as solar and geothermal in addition to bioenergy.
In a bilateral meeting with Prime Minister Viktor Orbán prior to the launch of the IEA report, Dr Birol discussed global energy security and IEA modernisation. He underscored the importance of greater energy-supply diversification among the IEA’s key recommendations.