This target had already been surpassed last year, due to faster-than-expected installations, PwC said recently. By February 2024, this figure had reached approximately 6,800 MW through the combined efforts of industrial producers and household contributors.
As of early August 2024, Mavir, Hungary’s transmission system operator, reported that industrial solar power plants in operation had a total capacity of 3,688 MW, producing a record-breaking output of 3,334 MW on Aug. 23. The figure, announced on Sep. 5 by the Ministry of Energy, surpassed the previous record of 3,238 MW set in July. By comparison, peak production in 2023 amounted to 2,731 MW, demonstrating the significant year-on-year growth.
By August 2024, Hungary’s total solar energy capacity had reached 7,085 MW. By early September, this capacity had increased further to 7,351 MW, according to fresh data from Mavir. The total included nearly 4,000 MW from industrial-scale solar parks and around 2,630 MW from household systems. Based on current trends, solar capacity is expected to grow by more than 1 GW for the third consecutive year. A recent PwC report highlighted that Hungary’s renewable electricity generation capacity, including solar, was nearing 7,850 MW by late 2024.
Hungary has since revised its NECP. The updated strategy now aims for a 50% reduction in greenhouse gas emissions by 2030 and increases the share of renewable energy from 21% to 29%. With the earlier solar capacity target having been achieved relatively easily, it was subsequently doubled to 12,000 MW. As of late 2024, approximately 7,100 MW of solar capacity is operational in Hungary, PwC reported. Industrial-scale facilities now account for almost 25% of gross domestic electricity production and cover 20% of total gross electricity consumption.
However, while Hungary is exceeding expectations on the renewable energy front, it is still largely dependent on foreign resources, which a recent development made painfully clear. On Nov. 21, the United States introduced sanctions on Russia’s Gazprombank, preventing it from handling any new energy-related transactions that involve the U.S. financial system. This move also targeted around 50 other Russian banks and the Bank of Russia’s System for Transfer of Financial Messages (SPFS).
The sanctions raised concerns among European countries, particularly Hungary and Slovakia, which rely on Gazprombank for energy payments under long-term contracts with Russian energy giant Gazprom.
“EU payments for energy resources through Gazprombank will likely become impossible at the end of 2024,” Sinara Investment Bank analysts told international news wire Reuters.
The next day, Minister of Foreign Affairs and Trade Péter Szijjártó condemned the sanctions, describing them as a direct threat to the energy security of Central and Eastern Europe. In a Facebook post, Szijjártó described any interference with energy supplies as an attack on the nation’s sovereignty. He announced plans to collaborate with regional partners, including Azerbaijan, Bulgaria, Serbia, and Türkiye, to address the issue, which he proceeded to do at the Istanbul Energy Forum the same day.
Despite these new sanctions, Russia reaffirmed its commitment to supplying Hungary with crude oil, natural gas, and nuclear fuel, Szijjártó said during a visit to Moscow on Dec. 2 to meet with Russian Deputy Prime Minister Alexander Novak and executives from energy companies. He underscored the importance of Russian energy deliveries in securing Hungary’s energy supply, saying the issue was not a “political matter” but one of “physical reality” and infrastructure.
“We have no intention of giving up this good cooperation,” he added. “If only because nobody has given us a better offer.” Szijjártó also noted that no alternative energy sources were as secure or competitively priced as those provided by Russia.
The next day, Szijjártó addressed Hungary’s Parliamentary Economy Committee to discuss the progress made in managing the impact of the sanctions. He revealed that solutions had been adopted in three of the four issues affecting Hungary’s energy transactions and that these legal constructions devised during his discussions in Moscow would ensure continued energy supplies.
A day later, Szijjártó announced Hungary’s formal request for an exemption from the U.S. sanctions on Gazprombank in Brussels, allowing Hungary and other regional countries to continue paying for gas deliveries. He noted that U.S. officials, including the Secretary of State, had signaled a willingness to hold consultations with allies regarding the sanctions. However, Szijjártó criticized the timing of these measures, highlighting the potential difficulties for Hungary, Serbia, and two NATO member states if imports of Russian gas were disrupted.
Eventually, on Dec. 5, Russian President Vladimir Putin canceled the requirement for all buyers of Russian gas to pay through Gazprombank, according to a presidential decree that amended an earlier one issued in March 2022 that forced buyers of Russian gas to pay for deliveries via Gazprombank through a scheme involving payments in rubles. Although Russian authorities have said they have been working on resolving the issue, it was not entirely clear how the payments would be made after the amendments to the decree.
This article was first published in the Budapest Business Journal print issue of December 13, 2024.
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