bneGREEN: Energy minister says geothermal powerhouse Hungary not exploiting its potential

bneGREEN: Energy minister says geothermal powerhouse Hungary not exploiting its potential
Keynote speech of Hungarian Energy Minister Csaba Lantos at the first Budapest Geothermal Energy Summit on June 5. /
By bne IntelliNews June 6, 2023

Hungary is a major geothermal power, but the country is not exploiting this potential, Energy Minister Csaba Lantos said during the first Budapest Geothermal Energy Summit on June 5.

Geothermal energy could contribute to strengthening the pillars of Hungary’s energy security and hence energy sovereignty. By radically increasing output, 1bn-1.5bn cubic metres of natural gas per year could be replaced at the national level, he added.

At present, around 10% of the energy used in district heating comes from geothermal energy.

According to Lantos, the security of energy supply and affordability will be the main questions of the future, while keeping the sustainability targets as well in focus.

The era of cheap energy is over and to achieve energy sovereignty Hungary needs to reduce energy imports, which stand at 76%, 5pp above the EU's 71%, he added.

Hungary is a geothermal powerhouse, with plenty of hot water under its soil, and the country is ranked fifth in the EU in terms of the direct thermal use of geothermal energy, said Marcell Biro, president of the Supervisory Authority for Regulatory Affairs (SZFEH).

Only 6% of heat production comes from geothermal energy, currently around 6 PJ, but that could be significantly expanded.

A government decree in March eased regulatory requirements for starting geothermal projects. The one-stop shop system will create an efficient and fast administration by transferring the previously dispersed responsibilities uniformly to the Mining Inspectorate, headed by SZFEH.

As a result, some 70 domestic geothermal energy permit requests were submitted, compared with the 4-5 annual projects launched in preceding years, Biro said.

Electrification provides an important pillar of the energy transition, according to Lantos. The country’s electricity requirement is set to rise 50% until 2030, boosted partially by EV battery companies setting up new energy-intensive production units in Hungary.

Planned or existing EV battery production sites in Hungary have 215 GWh of capacity, well below of Germany’s 545 GWh but still ranking the country third globally.

Due to the rapid growth of decentralised power generation, Hungary’s electricity grid needs upgrades and the majority of funding from the RRF sources will be used for this purpose, Lantos said.

Hungary needs to meet some two dozen super milestones, or criteria, to access €5.8bn from the EU's Recovery and Resilience Facility (RRF) and the €9.4bn credit leg of the RRF.

Earlier former Minister of Innovation and Technology Laszlo Palkovics estimated that transforming the electricity system would require €10bn investments.

The total built-incapacity of solar energy is set to double from 4.8 GW at present to exceed 10 GW by 2030, above the government’s previous 6.3-GW target.

Thanks to new capacities, Hungary, which imports 20-25% of its electricity needs on an annual basis, was a net exporter for a few days last month.

Hungary’s energy sovereignty cannot be achieved without relying on fossil fuels, Lantos said. The government aims to boost domestic gas production from 1.5 bcm to over 2 bcm by exploring new gas fields.


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