Editorial: Energy Realities Nipping at the Nose

Analysis

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Energy is the new black, the thing everyone wants, only cheaper. It is also the only thing about which anyone wants to talk. Well, that might be somewhat of an exaggeration, but it is undoubtedly at top of mind for business leaders. It was not by accident that this was the subject of our latest CEO Breakfast Briefing with our friends at the German-Hungarian Chamber of Industry and Commerce.

Unless you are a CEO or a finance director signing off on eye-watering energy bills, budgeting for next year, or trying to negotiate new deals, the realities of the coming winter may well, until now, have been largely theoretical. But as the nights draw in and the temperatures drop, the practicalities are starting to bite, like frost nipping at your nose.

For a start, those realities are beginning to seep into our daily news feeds. The fall school break, which would have been due in the last week of October, has been axed, with the Christmas holiday instead extended to run from December 22 to January 8, 2023. That period will extend to all state-run organizations. The compulsory holidays will, doubtless, irk those forced to take them, but at least it negates the debate about who has to stay home to look after the kids!

The National Bank of Hungary has similarly said it would lower the thermostats at its buildings to 18ºC (64ºF) during the winter, reduce hot water usage, and cut back on outdoor lighting. That 18ºC threshold will be a familiar one across government and local authority buildings this fall and winter, meaning the Christmas novelty sweater could well become an everyday office necessity until spring.

Some institutions are going even further: The Hungarian National Museum has announced that all but four of its rural buildings will close from November until February 28, 2023. According to international news wire AP, the 111-year-old, 1,800-seat Erkel Theater in Budapest, one of the three performance spaces used by the Hungarian State Opera, will also close its doors in November.

The scramble for diversified energy supplies has prompted Minister of Technology and Industry László Palkovics to vow that Hungary will eliminate Russian gas imports by 2050 through a large-scale electrification drive, following a review of Hungary’s energy strategy in early 2023. If that 2050 dateline does not exactly seem overly ambitious (by law, that is also the year Hungary should become climate-neutral), it does indicate the depth of Hungary’s reliance on Moscow for gas, although that is not unique in this region.

It also hints at something climate activists may wish to keep an eye on: in the short-term, it seems inevitable those that have coal – Poland, Germany, and to a much lesser extent, Hungary – will try to fill immediate energy gaps with what is at hand. But it might also drive a much more rapid expansion of renewable sources. The vital question will be where the balance falls between those two ends of the seesaw.

In the meantime, the less lofty among us must do what we can. At Chez Marshall, there is a grim determination not to switch the boiler on, though the fireplace has been lit and the kids have been told to put on extra layers. I’ll leave you with words shamelessly stolen from “Game of Thrones” for one of our headlines in this issue: “Winter is Coming.”

Robin Marshall

Editor-in-chief

This editorial was first published in the Budapest Business Journal print issue of October 7, 2022.

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