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Renewable energy has room to grow but faces challenges

Although natural gas has always played an important role in Hungary’s energy market, renewable energy sources (RES) are today assuming ever greater importance, albeit with plenty of room for growth. Some options, such as biomass, come with their own problems, while others, like wind power, face regulatory challenges.

The fastest growing sectors for alternative energy sources in Hungary are represented by biomass and geothermal. The target – as outlined in the National Energy Strategy 2030 – is to create a sustainable and energy efficient economy, decreasing foreign energy dependency. One recent example is a cooperation agreement signed between the EPBiH (Electric Utility of Bosnia and Herzegovina) and MVM Group, the largest power producer in Hungary, which will look at developing hydropower, wind and solar energy. Moreover, thanks to the European Demonstration Project, innovative green power stations are to be implemented in the south-eastern villages of Pusztamagyaród and Kaszó. 

Hungary has significant growth potential in many fields such as solar energy, wind power, and geothermal sources. But while increasing use of wind power has became a worldwide trend, Hungarian capacity for growth seems hampered by bureaucratic regulation. That is despite the fact that, according to the last Global Wind Energy Council (GWEC) report, in the last 20 years wind installations grew by more than 20% and global wind power capacity is projected to double in the next five years. The apparent unfavorable Hungarian attitude towards greater use of wind power seems particularly odd, given the fact that 43% of the country’s area is deemed to be suitable for economic utilization of wind power. According to a Hungarian Investment Promotion Agency report: “There is 330 MW of wind power capacity installed in Hungary. In areas that are 75 m above sea level, the annual average wind speed is above 5.5 m/s. At higher altitudes, the opportunities are even more promising.”

Biomass and geothermal are considered the beating heart of Hungarian RES, since Hungarian agriculture can produce plenty of biomass material and the so-called geothermal gradient exceeds the global average, encapsulated in one of the country’s natural treasures: all those spas. In particular, there is significant potential in increasing the role of geothermal energy in the supply of heat. Indeed, it is already a common heating method in some sectors, such as horticulture.

Hungary has also significant room for development in solar energy. According to HIPA: “The use of solar energy in Hungary is around 1% of the total renewable energy usage, and most of that is via solar collectors.” The number of photovoltaic projects is rapidly increasing but, as of now, private individuals rather than public institutions or establishments own most photovoltaic panels and collectors. Thanks to a new tariff system that is specifically geared to encourage solar energy use, further growth in this sector is expected, which also makes it more attractive to potential investors.

The Budapest Business Journal asked MEKH to comment on a number of the issues raised in this article, but it simply pointed us to a Hungarian-language pdf of the relevant regulations. 

Wind farms blown away by regulations

Two recent legislation changes have made the installation of wind power parks in Hungary all but impossible, says the Regional Center for Energy Policy Research (REKK). The think tank looked at the effects of a ministerial decree setting more stringent rules on wind turbines’ technical aspects, and a government regulation that tightened the conditions for installing a wind farm. 

REKK compared the technical specifications of 208 commercially available turbines, including models by Siemens and GE, with the newly set standards and found that only nine met the first four conditions (the think tank was unable to assess noise emission).

REKK also looked at how difficult it is to meet the location requirement. The regulation says that wind power parks cannot be installed in built-up areas. It also says that a wind farm has to be at least 12 km away from the borders of areas that are intended to be built-up. REKK picked a part of Kisalföld where there would be sufficient wind power for a farm and could not draw a 12-km radius circle without covering a town.

The aim of the legislation is not clear, says REKK. It might be to favor certain wind turbine manufacturers, or to make wind farm installation impossible. Whatever the reason, it greatly restricts the market entry of leading turbine makers, the think tank noted.

Requirements:

Tower’s maximum height: 100 m

Turbine’s capacity: up to 2 MW

The blades cannot be closer to the ground than 50 meters on systems generating more than 50 kW (only 30% of turbines met this requirement)

The length of the blades cannot exceed 50 meters on systems generating more than 50 kW

The noise emission cannot exceed 60db in safety zones, 40db outside safety zones

The list of turbines that meet the requirements:

GE 1 .85-82.5

Goldwind/Vensys Vensys 77

Goldwind/Vensys Vensys 82

Goldwind/Vensys Vensys 87

Enercon E-48

Enercon E-82

Gamesa G80

Gamesa G97

Q Envision 1 .5-93