Hungary has the first successful new geothermal projects - It could save a lot of gas
In his opening speech at the Budapest Geothermal Energy Summit, the state secretary expressed his confidence that the first successful drilling will be followed by others, which will together contribute significantly to the goals of Hungary's recently developed National Geothermal Energy Action Plan.
He noted that the government's expectation for exploration projects is to double annual geothermal energy production by 2030, which the government estimates will save 500 million cubic metres of gas consumption per year. In fact, by 2035, this could potentially rise to 1.2 billion cubic metres per year, from the current 8 billion cubic metres per year.
This would be a very significant step towards energy sovereignty,
he stated.
Attila Steiner recalled that currently 12 major cities in Hungary have geothermal district heating systems, and the largest such project in Europe was recently inaugurated in Szeged, while several other smaller geothermal projects are also producing.
He noted that government analyses show that there is great potential for meeting geothermal energy demand for heating and cooling in the industrial, agricultural and public sectors, but also for district heating and electricity generation.
To unlock this potential, a number of measures are needed, such as mitigating investor risk in the drilling phase, for which government incentives are required, he added.
Later, in a panel discussion, he pointed out that the government could provide non-reimbursable subsidies to mitigate the higher initial risk of projects, to compensate for some of the significant costs incurred in unsuccessful drilling projects, as investors would have to share the costs.
He noted that it is not good if, for example, the drilling of two wells yields no results and investors' money runs out, even though the third well would have been a successful one.
Steiner pointed out that a pilot project currently has a budget of HUF 5 billion for these purposes, and the government would like to increase this from the EU's recovery and resilience facility. In addition, soft loan opportunities are also possible to support surface installations, infrastructure investments and grid connection.
He stated that the government is fully aware of the main obstacles that still hamper the exploitation of geothermal energy and is working to simplify the regulatory environment and reduce financial and geological risks as much as possible.
He said it is important to increase the visibility and social awareness of geothermal projects and to step up the administrative capacity. It is precisely for these reasons that the government has set the promotion of geothermal energy, the preparation of a geothermal action plan and the creation of a geothermal alliance as part of its six-month EU presidency programme.
Cover photo: Portfolio
