Renewable Energy Potential in Hungary.

BASIC FEATURES OF HUNGARY

Located at the center of Europe, Hungary is mostly flat with some hills and low mountains, favorable for agricultural and forestry production. This special characteristic has historically been recognized internationally, having a positive influence in the growing biomass and biofuel sector. The country´s area is 93.033 km2: 57,4% is agricultural, 20,9% forests, 0,9% reed and fish pond and 20,7% uncultivated land area. The total population of the country is declining and by 2020 was 9.66 million (WPR, 2020). Budapest, is the largest city with approximately 1.7 million inhabitants, followed by Debrecen, Miskolc, Pécs and Győr with around 100-200 thousand people.

Figure 1. ADMINISTRATIVE REGIONS OF HUNGARY

Administratively, the country has 19 counties whose areas are divided into sub-regions and 23 towns with county rights (Figure 1). Whereas the Transdanubia is a hilly area, the highest mountains are located at the northern part, adjacent to the Slovakian borders. The main river is the Danube which divides the country into two parts. The major body of inner water is the lake Balaton situated in Transdanubia (UNFCC, 2017).

GREEN GROWTH IN HUNGARY

Renewable energy transition – Green Growth- represents a new economic development model in Hungary with strategic plans and objectives integrated to the European Union climate and energy commitments. This framework implies the introduction of innovation and high technology factors by using clean, smart and affordable alternatives, in order to ensure energy independency, security and decarbonising energy production. According to the International Energy Agency (IEA) the total energy supply (TES) by source between 1990 and 2020 is led by imported natural gas and oil, followed by nuclear, biofuels, waste, coal, wind and solar energy with noted less proportion (Chart 1). The Hungarian energy independency and security is considering the maintenance of the nuclear capacity which can be mixed with renewable sources. With this strategy, the country is planning to reach a climate neutral economy by 2050. In 2017, the United Nations Framework on Climate Change remarked biomass as the most representative renewable energy source in Hungary with 80% of the total share. This position is based on the extensive agricultural production, improved with the inclusion of the country as EU member, bringing more competitiveness and efficiency to the market. Another reason is the amount of forests managed in a sustainable way by private companies (48%). This feature has also helped the country to keep CO2 emissions at low levels, regarding the sink capacity in forestry areas.

Chart 1. HUNGARY ENERGY SUPPLY 1995-2020 (TJ)

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Hungary is heavily dependent on energy imports, with oil and gas at levels of 93% and 70% respectively. Being the primary energy sources they are followed by nuclear. Oil is currently the main source of the transport industry; natural gas has the largest share of energy consumption in residential and commercial sectors; and nuclear energy represents the most important electricity generator. As a result, the primary objective of energy policies is increasing and diversifying the share of renewables sources and maintaining nuclear capacities to satisfy the whole energy demand (transport, heating, cooling, and electricity). For those reasons, the Hungarian Energy and Climate Strategy seeks to achieve a clean, smart and affordable energy by 2050, which will require a combination of options regarding national endowments. The strategy describes key dimensions for the enhancement of energy independency, price affordability and economic development: decarbonisation and energy efficiency. They can be achieved through nuclear, renewable energy sources (RES), energy efficiency and innovation. The key actions of gaining energy independency are: energy savings, domestic renewable energy in a decentralized approach, European integration for energy infrastructure and nuclear sources for roads and railway transport systems.

Table 1. RENEWABLE ENERGY POTENTIAL IN HUNGARY

Table 1 depicts alternative renewable energy sources different than biomass. Several studies from the Renewable Energy Subcommittee of the Hungarian Academy of Sciences have remarked that from the different renewable options, solar energy is distinguished because it can yield the highest power in the country, superior to hydro, geothermal, biomass and wind. But most importantly, owing to its prevalence in the residential sector which does not require grid connections like wind energy sources and is less energy dependent like biomass industry. Nevertheless, the Ministry of National Development argues that these rates are dependent on high injection of capital investments and technological innovations whose funds are not available. The same institution determines that a combination of biogas, biomass and geothermal energy will be primary but not exclusively used for heat generation purposes.

Additionally, solar and wind energy based sources are expected to increase but at different levels because of the restrictions of wind parks, mainly associated with the lack of available area and the proximity to populated zones. On this observation, in 2016 the Hungarian Government stated that wind power is not optimal in the country and solar and geothermal power is more advantageous. This affirmation was also supported by Bartholy et al, 2003; whose model estimations suggest the limited extractable wind power in most of the Hungarian regions owing to the low mean wind speed. Among other reasons, the Parliament State Secretary said that the wind blows mostly in the afternoon and the evening when demand of energy is low. The government also points out that in the coming years photovoltaic technology will be more price accessible facilitating the implementation of projects oriented to satisfy electricity demand (Table 2). With this, Hungary has a relatively good renewable energy potential in the fields of the utilisation of biomass, biogas, geothermal and solar energy. The main strategy is to modernize and transform the sector injecting innovation and technology.

Table 2. PERCENTAGE SHARE OF VARIOUS RES IN HUNGARY (2010-2018)

Conversely, Bioenergy (biogas and biomass) are leading sectors planned to become promising renewable sources for the next decades as have been over the last thirty years. Traditionally, biomass has been the most important renewable energy in Hungary, accounting for nearly 90% of all renewable energies (Hancsók et al, 2012), just followed by geothermal, wind, hydro and solar power. However, there is a significant difference between biomass and the rest of competitors. For example, the Ministry of Agriculture and Rural Development estimated that by 2020 the annual biomass potential was around 258,76 PJ, mainly focused on three areas: biofuels (45.5 PJ) represented by bioethanol and biodiesel; solid biomass (188.26 PJ) and biofuel 25 PJ. On the other hand, a study performed by the Renewable Energy Sub-committee of the Hungarian Academy of Sciences defined the main categories of biomass that makes the agricultural and forestry fields in the country potential for the sector: wood mass (56.5 PJ); plant biomass and by-products waste (74-108 PJ); secondary biomass such as liquid manure, wood processing (18.7-23 PJ); tertiary biomass such as food waste and sewage sludge (54-134 PJ). Regarding agriculture and the total availability of resources in Hungary, the same study forecasted the energy potential from the sector by 2030. In total, annual biomass stocks are around 350-360 million tons, in which 105-110 of the biomass will be produced and used.

To be more specific, energy crops have different inputs and outputs:

1. Solid fuels for direct combustion, thermal processing and electricity generation.
2. Liquid fuels mainly for bioethanol and biodiesel.
3. From the fermentation of sugar, starch and cellulosic crops is also produced bioethanol.
4. From vegetal oil (oil seed rape and sunflower) can be produced biodiesel
5. Form coppice, miscanthus and whole-crop cereals derive solid fuel.

The production of biomass in Hungary is strategic because agricultural areas are broadly available. Moreover, it brings extra socio-economic alternatives especially in deprived rural areas. Either solid, liquid or gas sources, they can generate surpluses for the conversion to industrial products (Hancsók et al, 2012).

ENERGY PROFILES

This section is of relevance because offers an overview of the energy consumption in Hungary, which will help to understand the significance of each renewable source and identify the most prominent and potential over the years. In addition, patterns of change to the transition for decarbonizing the Hungarian energy mix.

Chart 2. PRIMARY ENERGY CONSUMPTION – HUNGARY

The primary energy consumption has been at declining levels since the late 1980’s, with transitory increasing during the mid of 2000 and 2010 decade (Chart 2). By 2019, the rank was 276 Terawatt-hours. Chart 3 displays energy from electricity, transport and heating, being the priority sectors for energy consumption. 

Chart 3. ENERGY CONSUMPTION BY SOURCE – HUNGARY

Energy consumption by source from 1965 to 2020 reflects further details upon the transition to a greener energy mix (Chart 3). The only source keeping increasing patterns is the nuclear. The basis of renewables that entered to the market was the hydropower in the mid-decade of 1945´s but at very low levels, followed by biomass in 1994, sustaining their position until 2001 with the arrival of wind parks. Solar sources started in 2008 and by 2020 dominates the demand from renewable sources with 6 Tw-h, followed by biomass, wind and geothermal. Hydropower remains at lower rates that the rest of players. It is important to observe that compared to fossil fuels, renewables are in a very low position, therefore the national efforts to achieve the transition to a greener, more efficient and independent energy sector by 2030 make imperative to expand financial investments. 

Chart 4. SHARE OF PRIMARY ENERGY PRODUCTION FROM LOW-CARBON SOURCES

The share of primary energy from low-carbon sources in which is included nuclear power describes an expansion from the 1980´s and since middle 2000´s. By 2019 the mix of renewables amounts to 18,64%. Chart 4 also shows a longer range from 1900, where is observed the notable ascendant line of biomass since 1990´s. As is indicated, in terms of capacity, solar energy started its great expansion after 2013, leaving behind wind and hydropower.

Regarding the previous scenario, it will be given a general analysis on the renewables resources that have led the energy share during the last decades and the most potential sources in Hungary (Table 2 and 4). The analysis has been based on official data from the National Energy and Climate Plan and the National Energy Strategy performed by The Ministry of Innovation and Technology and the Ministry of National Development, respectively. The section will help to identify important features and potential opportunities for future investment projects in the country, based on the sectors where renewables are required (Table 3):

• Electricity: As country estimations lead to intensify energy production at least 20% by 2030, increasing electricity capacities is at the core of energy transitions, being one of the most relevant sectors. With levels under 680 MW, in 2016 the upturn will amount to 6.500 MW by 2030. Correspondingly, it is expected to rise 10.000 MW by 2040. Currently, aside nuclear energy, biomass contributes importantly by burning primarily firewood in former coal power plants, but at low efficiency rates. In terms of photovoltaic systems, further technological investments are projected, enabling the exploitation of domestic solar energy at lower cost. Yet, the government is aware of the environmental impact of large scale photovoltaic systems, therefore, pre-existing projects and solar panel roofs have special preference. The plan is also involving wind power stations whose capacities will approximate 330 MW. Through existing hydroelectric plants and new to be built, the total energy demand is expected to be fulfilled.

• Heating and cooling: Biomass and biogas are seen as potential sources to satisfy future heating and cooling demand, used to individual equipment and district heating. Likewise, solar systems at competitive price and support policies will facilitate the competitiveness of investments. In less amount but not least, geothermal power represents a complementary and competitive resource, owing to Hungary´s geophysical characteristics which allow the exploitation of geothermal energy in districts and the agroindustry. Nonetheless, its development will depend on additional financial support and other public incentives. The volume of municipal waste will also contribute to biodegradable yields for heating demands.  

• Transport: Regarding the Renewable Energy Directive to expand for at least 14% the use of clean energy in the transport sector by 2030, Hungary is committed to increase the share of first generation biofuels to approximately 7%. The main source of these type of fuels are food crops and fodder plants. On the other hand, second generation biofuels from waste and biogas sources will amount to 3.5%. The remaining 3.5% is expected to be met using electricity, considering the top priority of shifting public road transport and passenger cars into electric or hydrogen-propelled vehicles.

Table 3. ESTIMATIONS SECTORAL SHARE OF RENEWABLE ENERGY IN FINAL ENERGY CONSUMPTION IN HUNGARY

POTENTIAL OF RENEWABLES FOR ENERGY DEMAND

Bioenergy and Waste (Biomass and Biofuel).

The UNFCC and the Department for Climate Policy determined that the natural and climatic conditions of Hungary promote the agricultural and forestry production (Figure 3), enabling potential opportunities for biomass and biofuel sinks. In fact, since 1990 it has amount to 1.1-1.2 million tons of CO2 per year. Compared to EU member States, the country has an outstanding position in biomass-based green production energy (Table 4). As municipal organic waste is qualified as biomass sources, is included within the renewables share. Approximately, 60% of municipal waste is used in incineration plants, following environmentally safe standards. Circular agroecology is considered as an opportunity to reduce agricultural footprint. According to the National Action Plan for the Development of Bio-economy, by 2019, 3.2 million tons of biomass were used for energy purposes. From these levels, just 123.4 thousand tons were imported to the country.

Figure 3. TOTAL PRIMARY RESIDUAL BIOMASS POTENTIAL FROM AGRICULTURE IN HUNGARY

The potential of biomass and biofuel production is also observed for industrial-base materials purposes. For example, in emerging biotechnology areas, enabling the production of pharmaceutical and fine chemical products. This industry plays an important role in the reduction of GHG emissions of traditional industrial manufacturing processes and products. At local levels, the use of by–products has been fundamental for renewing small and medium scale bio-economies, specially from agriculture sources for instance straw and maize stalk. Moreover, from sewage water and sludge in biomass and biogas power plants.

Regarding the aggregate net energy gain of oil plantations, first generation crops such as maize, sugar beet are of great importance in se renewable sector. In terms of second generation crops (not used for food production) including energy poplar, energy reed and acacia, Hungary ranks as second from the rest of EU members (Figure 4). Projections from the National Energy and Climate Plan (NECP) estimate that by 2030 the rise of biomass and renewable waste will be 136% compared to 2021 levels.

Figure 4. POTENTIAL NET ENERGY GAIN (GJ/HA) OF SECOND-GENERATION ENERGY CROPS IN EUROPE – HUNGARY

Solar Energy

Estimations made by the Ministry of National Development suggest that after 2020 the potential of solar power may be used at a greater extent particularly for electricity generation, owing to the price reduction of photovoltaic technology. Projections from the National Energy and Climate Plan (NECP) estimate that by 2030 the rise of solar energy will be 382% compared to 2021 ranks. Reductions will be possible by supporting relevant research in the field, new infrastructure development and innovations on pilot projects. The solar potential of Hungary is remarkable compared to other European countries (Chart 5). According to Kumar et al, 2021, currently the country has 10 solar power plants with more than 10 MW and five important plants under 10 MW capacity expanded over Hungary.

Chart 5. PV POWER POTENTIAL IN HUNGARY

The significant increase of solar power is depicted in Chart 6, with the highest irradiation compared to other countries of the region. It also illustrates that the most prominent area is in the Southern part of Hungary. In general Hungary reflects the highest irradiation and temperature profiles.

Chart 6. TRENDLINE OF SOLAR ENERGY SHARE IN HUNGARY (2010–2018)

In parallel, most of the solar parks are situated in the Northern and Eastern zones of the country. The northeast region dominates with the highest energy capacity with more than 10 MW. The Southern regions have the higher photovoltaic potential but with lesser solar parks (Chart 7). This scenario can be seen through the lens of potential opportunities for future investments in solar parks.

Chart 7. SOLAR PARKS PRESENCE BASED ON POWER CAPACITY IN HUNGARY

Geothermal Energy

Geo-physical features in Hungary bring favourable conditions for geothermal energy production. Despite geothermal power is one of the less exploited renewables in Hungary, its potential has been recognized over the last decades. The main geothermal wells have been exploited for agricultural purposes, particularly in the Southeast zone, where greenhouse heating and plastic-tents are traditional industries (Toth, 2020). The agricultural and geothermal potential of the area are important features for the development of present and future projects. Figure 5 and 6 depicts the highest potential geothermal temperatures in the country in the ranks of 30 °C and 90°C, mainly located in the Southeast and Northern plain. Toth (2016) studies suggest that in the 70´s, the sector had a peak with the registration of 525 geothermal wells. The best of them had a production temperature exceeding 90 °C and 1.540 MW of power capacity.

Heat pumps from geothermal power are significant in the European market and international companies operating in the country have allocated important investments in the sector, that is the case of NATO military base, Telenor and Tesco. There are also residential uses starting at 10 KW for individual units. In general, by 2019 geothermal district heating has presence in 23 towns of Hungary, representing an installed capacity of 223,36 MW and 2.288 TJ per year production (Toth, 2020).

Geo-isothermal map 30°C rock temperature    

In 2021, the Ministry of Innovation and Technology announced a call for tender to support future geothermal heating and electricity projects regarding country capacities rounding about 60MW by 2030 and 104 MW by 2040. The geothermal power is of interest because it can be combined with biogas and biomass sources to support heating demand, as one of the most significant energy sectors of the country. For instance, agriculture is more efficient whether geothermal energy is used to back greenhouse cultivations, currently controlled by fossil fuel-based heat generation. Furthermore, geothermal capacity works for different energy purposes such as drinking water supply, remarking the cases where thermal waters are used for medical and tourism purposes.    

GENERAL FACTS FROM THE EUROPEAN COMMISSION – RENEWABLE ENERGY DIRECTIVE 2009/28/EC

Current Hungarian energy policy is primary based on the European Union legislation which require the fulfillment of the Renewable Energy Directive stablished by the European Commission. It remarks that all member states design and implement a National Energy and Climate Plan (NECP), determining how and at what levels will they reduce energy consumption, greenhouse gas emissions (at least 40%), increase energy efficiency (at least 32.5%) and improve inter-connection rates among neighboring states. These measurements are intended to fulfil the goals of the Paris Agreement, pursuing clean energy transitions and reducing the impacts of climate change. In the Hungarian case, the National Energy Strategy 2030 is the NECP which started in 2011. It determined key objectives related to:

• Decarbonisation through renewable energy.
• Improving energy efficiency.
• Innovative transformation of the internal energy market (less dependent on energy imports).
• Increasing the share of low CO2-emission modes of transport.

Whereas the NECP proposed a share of 20% from renewable sources in gross of energy consumption by 2030 (Chart 5), by2021 the levels are about 13%.As one of the key objectives of the national energy and climate plan is to increase energy security, being less dependent on international energy trade, the integration of nuclear and renewable energy markets will be fundamental.

CHART 5. HUNGARY –  NATIONAL TARGETS AND CONTRIBUTIONS FORESEEN IN THE NECP.

Given the tight environmental regulations by the European Commission for the longer-term depletion of the hydrocarbon reserves, a research developed by academics from the University of Debrecen (Czimre et al, 2019) remarked that over the last 10 years Hungary has set different priorities based on local energy production and consumption, where the mix of renewables has played an important role for the transition:

• Supporting heat and/or electricity production using renewables (biomass and biofuels).
• Satisfying local heating and cooling demand from renewables (biomass and biofuels).
• Renewable-based regional development (innovative transformation and decarbonisation using renewables).
• Renewable-based electricity generation, heat and electricity cogeneration and bio-methane production.
• Supporting the establishment of low and medium-capacity bio-ethanol factories.
• Supporting the preparatory and project development activities of geothermal energy-based heat and electricity production projects.
• Photovoltaic system development to reduce the electricity costs.

Table 5. SWOT ANALYSIS RENEWABLES POTENTIAL IN HUNGARY (Based on National Energy Strategy).

Based on the SOWT analysis (Table 5), the scenario provides hints on the priorities that the country has settled to achieve the transition to a green economy but also the challenges they must face. Given the national assets, Hungary continues building new models of development and competitiveness in the energy sector, specially introducing new technology and innovative solutions to make it more efficient, clean and less dependent on imports. At the first phase of the present research work, whose main information was collected through relevant official sources, databases and peer review academic articles, it is important to emphasize that the country has potential and long term investment opportunities specially between biomass, biofuel, solar and geothermal energy. However, solar energy can be the most prominent and cost-efficient power for the long term, if prices decline and more technology investment is introduced for its development. Whereas energy demand for heating, cooling, electricity and transport represent the main reasons renewables projects are boosting the Hungarian bio-economy, European Union commitments to develop low carbon economies and reach the “net-zero” emissions will be the backbone to develop a green growth among all member States.

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