The energy crisis strengthens the need for security of supply, and pursuing decarbonisation targets is a good opportunity to increase energy independence, said János Péter Horvát, President of the Hungarian Energy and Utility Regulatory Office (MEKH), in a presentation at a joint online conference organised by the Hungarian Economic Association (HEA), the Economic Review and MEKH on Wednesday. The online conference was held in the context of the May 2022 thematic issue of the Economic Review, which focused on the promotion of the green transition and new directions in energy market regulation.

In his introductory presentation, Péter János Horváth recalled that the pre-crisis period was fundamentally about sustainability, with European energy policy setting increasingly ambitious climate protection targets and subordinating the entire energy system to decarbonisation. In line with EU targets, Hungary has set out its own decarbonisation programme, which aims to achieve a 21% share of renewables in gross final energy consumption by 2030, with final energy consumption not exceeding 785 petajoules (PJ). Hungary has also committed to achieving 90% of electricity generation decarbonisation by 2030, and a target of 6500 megawatts (MW) of installed solar capacity by the end of the cycle, the MEKH President said.

The full conference can be viewed here:

János Horváth pointed out that the country has met its 2020 renewable energy targets, reaching a share of almost 14 percent against the 13 percent target, and the share of renewable energy sources in the electricity and transport sectors is steadily increasing. In 2021, 63.5 percent of the electricity generated came from carbon neutral sources, including 44.3 percent from nuclear and 19.3 percent from renewables. The target of 6,500 MW of solar capacity by 2030 could be met as early as 2024.

The energy crisis triggered by the Russian-Ukrainian conflict has shifted the focus from sustainability to prices and security of supply, said the MEKH President. He stressed that the Hungarian economy is heavily dependent on natural gas, and the sanctions on energy carriers and the Russian fossil fuel divestment programme could threaten Hungary’s security of supply in the short term. Continuing and speeding up the decarbonisation process is a good way to overcome the energy crisis caused by high prices and supply uncertainties, said János Horváth.

The decarbonisation process is challenging in the short term, due to the integration of renewables into the grid and the need to maintain system balance, but in the long term it will increase security of supply and energy independence. Green energy investments, grid reinforcement and development, energy efficiency measures will lead to more expensive energy in the short term, but in the longer term will help avoid price shocks during an oil or gas crisis, said the President of the MEHK.

Following the introductory presentation by Péter János Horváth, Éva Szabina Somossy, green economy expert at MEKH, presented an international price comparison analysis. Afterwards, Ágnes Csermely, Head of the Analysis and Modelling Department of MEKH, gave an overview of the impact of solar power plants on wholesale market prices and on the production of conventional technologies, followed by Örs István Ringhoffer, Deputy Head of Department at MEKH and Péter Vedres, Head of Department, presented a forecast on the costs of the energy efficiency obligation scheme, and finally Zoltán Pék, Energy Management Specialist, shared his thoughts on the experience of the test environment for energy regulation. The discussion following the presentations was moderated by Tamás Halm, Editor-in-Chief of the Economic Review and member of the MKT Board.