Coping with COVID, renewables hot topics at Budapest Energy Summit
The third Budapest Energy Summit, organized by White Paper Consulting was held this week, gathering the leaders of the energy industry, who discussed the key questions of the global and regional energy sector.
This year, the summit was held in a virtual format. The events were followed by participants from more than 27 countries around the world, providing an international platform for the regional and global energy community to discuss the driving trends of the industry and to identify the opportunities and challenges ahead. One of the most prominent topics this year was how the energy industry coped so far with the challenges of the fast-moving coronavirus situation and adjusted to the "new normal".
Hungarian Minister of Foreign Affairs and Trade Péter Szijjártó gave the opening speech of the conference highlighting the historic gas purchase agreement concluded this year, which is the first long-term contract in the history of Hungary with a Western player. This means that by 2027 Hungary will secure 10% of its gas supply from the Krk LNG terminal, which is set to start operation from January.
"This is a huge step in Hungary’s energy diversification," said Szijjártó.
Kadri Simson, Commissioner for Energy at the European Commission underlined that achieving climate neutrality requires the transformation of our entire economy, for the benefits of the whole society.
"The Green Deal provides a comprehensive vision that covers many sectors and offers a credible growth strategy for the future," she added.
COVID-crisis highlights importance of digitalization
Gergely Szabó, regional chairman of MET Central Europe said, "The COVID-crisis provided us with a future snapshot of how digitalization will play a powerful role in our industry and it will also be a factor of unleashing disruptive solutions. We are heading towards a data-driven culture in which the most efficient data-process systems and the related decision-making mechanisms will be essential attributes of the successful market players."
Within the framework of a panel discussion, leaders of MET Group, E.ON Hungária Zrt. and Shell discussed the impacts of the pandemic situation on the global gas market, which has undergone many changes recently.
Mahdjouba Belaifa, head of the gas market analysis department of the Gas Exporting Countries Forum (GECF) highlighted in her assessment that gas markets are more resilient to economic shocks, yet there is still a dire need to cooperate and collaborate together to mitigate their exposure to unprecedented circumstances.
Leaders of the biggest players; Tellurian, NOVATEK, TurkStream, MET Group and MFGK Hungarian Gas Trade Ltd. agreed that new regional gas infrastructure projects were long-awaited because they allow more trading, which means more competition and more opportunities.
According to Szabolcs I. Ferencz, chairman of the board and CEO at FGSZ Natural Gas Transmission Ltd., one thing is for certain.
"Even in long term gas will still be used to meet energy demands. FGSZ knows that the wind of change has started to blow, while as the saying goes: ʼwe cannot direct the windʼ, we can adjust the sales, what we have already started, and we are in the best position to riding those new waves with success," he noted.
Energy demand set to fall by 5% in 2020
László Varró, chief economist of the International Energy Agency (IEA) presented for the first time in the region the IEA’s flagship publication, the World Energy Outlook 2020. In his presentation, he emphasised that energy demand is set to fall by 5% in 2020, the largest shock in seventy years, but not all fuels felt the impact in the same way, renewables emerged as a clear winner.
Péter Kaderják, Hungary’s Minister of State for Energy and Climate Policy introduced in his speech the policy goals of the Hungarian energy- and climate strategy. Kaderják started by confirming that Hungary is fully dedicated to get to net-zero by 2050, this is enshrined in law. He emphasized that pursuing climate objectives must be balanced with supply security considerations and competitiveness.
"Hungary is willing to go ahead with more ambitious middle-term climate goals but we would like to see more progress in the EU in terms of climate convergence," said Kaderják.
Completing the decarbonization of the electricity sector is one of the urgent tasks as Hungary would like to see 90% of its power production becoming carbon-free by 2030. The clean mix will rely largely on new nuclear investment, phasing out lignite capacity, scaling up solar, while keeping gas a back-up capacity for flexibility and investment in grid infrastructure.
Daniel Yergin, energy expert and Pulitzer-price winning author also attended the summit introducing his latest bestseller "The New Map: Energy, Climate, and the Clash of Nations". Considering what is at stake for the CEE region’s energy agenda after the recent U.S. elections, the conference also featured Kurt Donnelly, Deputy Assistant Secretary of the State Department’s Bureau of Energy Resources and Kevin Book, managing director, ClearView Energy Partners LLC who shared their insights on the expected turning points of US energy policy.
Switch to renewables not too expensive anymore
Walburga Hemetsberger, CEO of SolarPower Europe speak at the Budapest Energy Summit about the role of renewables in our future energy system.
"To decarbonize the energy system, we can look at a scenario based on 100% renewables in 2050. The results are surprising: it is not more expensive, on the contrary, we have seen a 6% lower cost overall compared to a scenario when we still have fossil fuels," said Hemetsberger.
Graham Cooley, CEO of the world’s leading green hydrogen technology company, ITM Power highlighted that the reason why everybody in Europe is now interested in green hydrogen is first because of the cost reduction, secondly because it is the only net-zero gas if we want to achieve a net-zero future.
Jeroen Kirschbaum, lead country manager at ExxonMobil Global Business Center Hungary, noted that the energy industry is slow to change and the transition of the energy system will take a long time, because of its size, its complexity and the amount of infrastructure required to keep it running efficiently.
"We seek to improve the society, we are inspired to solve big problems and we know that we can make a real difference for the world through the application of science, technology, and innovation," Kirschbaum concluded.
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