Invest in renewables – an emerging sector

 

The renewable energy sector is a priority sector of ITD Hungary.  Understanding the sustainable nature, the high growth potential, and the dominance of green industries in the 21th century, ITD Hungary strives to attract investments in renewable-based heat and power generation and in related manufacturing activities.

 

Current situation

 

After joining the European Union (EU) renewable energy utilization started to grow intensively in Hungary.  While before 2004 green electricity production amounted to only 0.5% of the total electricity production, by Q1 2009 it reached 4.3%, and renewables (RES) around 5.1% in total primary energy supply (TPES). This growth represents a fivefold increase in electricity production compared to 2001. At present biomass represents almost 90% and geothermal 8.2% of renewable energy use. Hungary is rich in renewable energy sources. Pellets and other solid biomass are the most widely used resources in line with present renewable generation ratio.

 

 

 

Source: Energy Centre, 2008.

 

 

Strategic targets

 

In 2008, the government approved the Renewable Energy Strategy for 2007-2020. The policy targets the increase of RES production to 15% by 2020. The strategy will favour decentralized energy production, the cogeneration of heat and power and the establishment of small power stations utilizing renewable sources locally. The strategy forecasts a substantial amount of new investments by 2020, in the field of biomass, wind, solar and geothermal energy.  Electricity generation from RES will grow faster than heat generation.

 

 

Source: Energy Centre, 2008.

 

 

Targets: Renewable Energy

 

	2008	2020
Share of RES in energy mix	4.5%	15.0%
Electricity production of RES	1630 GWh	9470 GWh
Heat production of RES	36 PJ	87 PJ

 

 

Financial Incentives

 

the subsidy scheme is based on three pillars to meet the EU guidelines concerning RES:

1.      Feed-in-tariff system

2.      EU funds for RES

3.      National Energy Program

 

1.      Feed-in-tariff system

Hungary has introduced a sustainable (non-central-budget-based) feed-in-tariff scheme which is guaranteed until 2020.

The system was modified in favour of smaller plants and those providing remote heating in 2008.  Rates are to be adjusted yearly in line with the inflation rate.

 

Feed-in tariffs from January 2010

 

 

Please note, that above rates are fixed in HUF. To convert we used the exchange rate: 1 EUR = 267,13 HUF

 

 

2.      EU funds for RES

 

In addition to the feed-in-tariff system, significant resources (EUR 280 million) are earmarked for supporting investments in the renewable energy sector under the National Development Plan that distributes EU Structural Funds.

 

KEOP 2009/4.4.0 Heat and/or electricity production from renewable sources

 

·        Supported activities: usage of biomass, biogas, geothermal energy,  solar energy, water energy, wind energy; and combinations. Biomass only eligible with connected heat and electricity projects

·        Eligible costs: preparation, project management costs, services, tangible, intangible assets

·        Amount of subsidy: HUF 1-1000 million, 10-60% of eligible costs

·        Application: as from 20 March 2009

 

KEOP 2009/4.2.0 Local heat and cooling supply from renewable sources

 

·        Supported activities: usage of solar energy, usage and processing of biomass, production of biogas, usage of geothermal energy,  installation of heat pump systems, (re)setting up of community heat supply systems

·        Eligible costs: preparation, project management costs, services, tangible, intangible assets

·        Amount of subsidy: HUF 1-1000 million, 10-60% of eligible costs

·        Application: as from 20 March 2009

 

KEOP 2009/4.6.0 Support of biofuel plants with medium and big capacity

·        Supported activities: Preparation, project management costs, services, tangible, intagible assets

·        Eligible costs: Preparation, project management costs, services, tangible, intagible assets

·        Amount of subsidy:

For medium capacity: 1200/2200 million HUF - 10-30%of eligible costs

For big capacity: 1500/2500 million HUF - 2-30% of eligible costs

·        Application: as from 1st November 2009

 

 

3.      NEP (National Energy Saving Plan)

 

The government subsidizes clean energy usage and energy efficiency for households with lesser amounts.

Supported activities:

•         changing or additional isolation of windows and doors

•         modernization of heating and warm water supply systems

•         isolation of buildings

•         using renewable energies

•         construction of energy saving buildings

 

Contacts:

 

If you wish to learn more or have inquires about the renewable energy sector (manufacturing or RES generation) in Hungary, please contact ITD Hungary experts:

 

Ms. Brigitta KAPA
consultant
ITD - Investment Promotion Directorate
H-1061 Budapest, Andrássy út 12.
t: +36-1-473-8222
f: +36-1-472-8180
e: