Following yet another hike in the European Union’s emissions trading system (ETS) in its fight against climate change, Hungary has announced that it aims to phase out its use of coal and be fully reliant on renewable energy sources by 2030
Hungary, along with neighbouring Poland, the Czech Republic, and Bulgaria, is one of the EU’s most coal-dependent member states – in 2016, it sourced 18% of its electricity from coal, 50% from nuclear, and 20% from gas. At present, lignite produces 14% of Hungary’s carbon dioxide emissions and half of the pollution of the entire country’s energy sector.
With the EU raising prices of lignite as a way of reducing greenhouse gases via the ETS, the Hungarian government has taken the decision to turn towards renewables as its principle power source.
The Hungarian government believes that a predicted price drop of up to 30% in photovoltaics gives the country with the chance to meet the energy directives proposed by the EU, which states that all 28 members within the bloc must source 20% of their energy from renewable sources by 2020.
Furthermore, Hungary’s government seeks to emulate Spain in order to calm fears amongst its mining communities about potential job losses as the country pivots towards renewables; following the announcement that Spain aims to move to 100% renewable energy by 2050, its government revealed a transition plan worth 250 million EUR, which is aimed at re-skilling coal professionals in clean energy jobs and funding renewable projects.
At present, Hungary has 500 megawatts of PVs installed but aims to increase this to 30,000 by 2022 in its renewable drive. Combined with the job creation that the move to green energy will bring, Hungary is proving to be an attractive proposition for solar investors seeking to invest in the CEE region.
One such company is Sun Investment Group, who already has a 15% stronghold on Poland’s solar energy market, thanks to a number of separate PV projects across the country worth 42.36MWp.
“With our portfolio across Poland set to expand in the future, and Hungary’s commitment to a renewable future, the region presents a number of exciting opportunities for innovation and investment,” said Sun Investment Group’s Chief Business Development Officer, Andrius Terskovas. “We will be keeping a close eye on developments within Hungary as we seek to develop our portfolio.”
With Hungary and neighbouring Poland taking their commitments to renewable energy increasingly seriously, the pivot is set to be closely observed by investors as to whether it spreads to the neighbouring Czech Republic and Bulgaria.