Energy policy in Hungary is currently focused on nuclear energy. Over 40% of the electricity is produced in the Paks Nuclear Power Plant in four reactors with a total capacity of 2,000 MW. There are plans to build two new reactors with a total capacity of 2,400 MW. The expansion of the Hungarian nuclear power plant will be made by the Russian nuclear corporation Rosatom. The new reactors should be finished by 2023.
Hard coal and lignite have a relatively small share in electricity generation in Hungary – 10-15%. Lignite deposits are concentrated in the region of Transdanubi and in the northern and northeastern parts of Hungary, while hard coal is located in the southern part of the country.
Most underground mines that produce hard coal are closed, and only approx.10% of the total coal output comes from the Márkushegy underground mine located in western Hungary. In 2012, the production of lignite amounted to almost 9 million tons. Approximately 95% was used to produce electricity and heat. There are plans to build a new lignite-fired power plant in northern Hungary. A new opencast lignite mine is also being planned. It is an open secret that the prime minister’s brother is probably involved in this investment. The opencast mine is not economically viable because there is no power plant nearby; however, the plan is being continued.
Renewable energy has a small share in electricity generation, just a few to several percent – approx. 10%. Renewable energy in Hungary is mainly the co-firing of biomass. Although there is a feed-in tariff system in the country, the tariffs are small and thus, distributed energy is developing very slowly. The government has been promising to raise tariffs for the last few years, but they still haven’t changed them.
This year, the Hungarian authorities are working on EU Regional Operational Plan 2014-2020, but the objectives have not yet been specified and it is not clear to what extent projects related to renewable energy and energy efficiency will be incorporated. By 2020, the government wants to increase the share of renewable energy to 15%.
Opencast lignite mines and power plants
Currently, there are three main regions of lignite mining in Hungary. Only about 10% of the total production of lignite comes from the underground Márkushegy mine located in western Hungary. The mine belongs to Vértesi Erômû TWU and supplies coal to the Oroszlány power plant. The power plant should finish production soon, so it is likely that the mine will also be closed.
90% of coal comes from the opencast lignite mines Visonta and Bükkábrány, which belong to the company MATRA (Matrai Erőmű Rt.). Lignite reserves of both mines are estimated at 0.5 billion tons. The company is looking for other deposits. Lignite extracted from the Visonta and Bükkábrány mines is used in the Matra power station which has five power units and two gas turbines. The power plant has a total capacity of 936 MW: 2 × 100 MW, 1 × 212 MW, 2 × 232 MW comes from lignite-fired units, and 2 × 30 MW from gas turbines. This power plant is the largest emitter of greenhouse gases in Hungary, responsible for nearly 10% of greenhouse gas emission in this country.
The Hungarian energy sector is very privatized. The biggest mining and energy company MATRA was taken over by a consortium of German investors, which consists of: RWE Power 25,7%, RWE Rheinbraun 25,2% and Energie-Baden-Württemberg (EnBW) 21,7%.