Author Description

The International Energy Agency's 2011 review of Hungary's energy policies and programmes. The review finds that regional co-operation is a vital element of Hungary's energy market and energy security policy. Hungary, which shares borders with seven countries, is well placed to improve regional energy security by catalysing the development of closely integrated regional markets for electricity and natural gas. A country strongly dependent on natural gas imports, Hungary has taken several commendable steps to manage risks to its supply. It has enhanced storage capacity and diversified cross-border capacity, and is developing new supply routes. Hungary is also working hard to strengthen the regional electricity market through new interconnectors and market coupling. Electricity demand within Hungary is expected to grow, while generating capacity is rapidly ageing. Investments are needed for grid improvements and generating capacity, both for increasing capacity (especially for low-carbon electricity) and replacing ageing plants. Ensuring predictable and attractive framework conditions for investing in energy infrastructure is crucial. The government is considering additional nuclear power units. The extent to which nuclear power capacity will be expanded should be clarified without unnecessary delay, as it will have broad implications for the viability of other current and future base-load technologies. Although per-capita energy consumption in Hungary is well below the OECD average, considerable potential remains for improving energy efficiency across all sectors. Measures to reduce consumption in the large existing building stock should be the government fs top priority for energy policy. Gradually, Hungary should also replace broad subsidies for energy use with direct support to those in need.