European Environment AgencyJune 28th-29thCopenhagen

Hungarian Country presentation Sandor Molnar

Energy, greenhouse gas emissions and climate

change scenarios

Sources used

•Third National Communication on the Implementation of Commitments under UNFCCC (Committee of Sustainable Development)

•Hungarian Climate Change Strategy (Ministry of Environmental Protection)

•Hungarian Climate Change Action Plan (Systemexpert)

•Hungarian Climate Change Country Study (Systemexpert)

•Hungarian Power Companies Database (MVM)

Present situation of GHG emissions in Hungary and the Kyoto commitments

• Hungary signed the UN FCCC in Rio de Janeiro in 1992.

• According to the Kyoto Protocol, Hungary has to keep its anthropogenic greenhouse gas emissions by 6% below the base level in the period of 2008-2012.

•With accordance with Article 4.6 Hungary selected the base as the average annual emissions in 1985-1987 as a base level.

Hungary’s emissions base

Fuel combustion 82647.1Mining 5463Industry 1952Agriculture 6855.3Waste Management 6247.5Forestry -3097

Total 100067.9

Table 1. Average emissions in 1985-87 in tons of CO2 equivalent

Total Emissions in Hungary

1985-87 1990 1995 2002CO2 (Mt) 83,7 71,7 58,7 61,8CH4 (kt) 664 544 797 820N2O (kt) 17 11 8 7.8

GWP (Mt) 99,8 82,1 73,9 77,9

Table 2. Estimated GHG emissions in 2000

Fugitive CH4 emissions from oil and gas activities

1991 1992 1993 1994 1995oil industry 0.26 0.25 0.26 0.23 0.25gas industry 290 257 274 273 291

coal mining 161 124 109 105 106 (Gg)

Table 3. Estimated fugitive methane emissions

Emission scenarios in the Hungarian Power Sector

•The Kyoto Commitments and the National Climate Change Strategy made it necesary to develop a baseline in the power sector

• The Hungarian Power Companies endeavoured to build a top-down baseline for the sector

Generation in Hungary, 2001

Coal26.37%

Oil9.92%

Petrol2.52%

Natural gas23.11%

Propane-gas2.09%

Hydro0.42%

Nuclear31.49%

Wood3.01%

Other1.07%

Modeling with ENPEP

• Complex hierarchical, non-linear market based equilibrium model with policy constraints

• Provides useful information for DSS

– Economic evaluation of an energy project

– Energy project’s role in the overall energy system

– Economic groth and energy demand requirements

– Energy policy evaluation

– Energy pricing and tariff development

Scenarios for emissions based on

• Economic growth => demand growth

• Proportion of fuel imported

• Capacity additions type, renewable penetration

Different scenarios pictured according to different assumptions on the basic variables

•Demand (smaller, larger)Two demand growth scenarios were examined, a relatively smaller (growth rate of peak load 0,9% per annum, gorwth rate of demand 1%) and a relatively larger (growth rate of peak load: 0,9% until 2005, after it 1,8%, growth rate of demand 1% until 2005, after it 2%) growth rate in the time period examined.

Demand base used in 2000: peak load 5750MW, annual demand: 38,5 TWh

• Time period: 2001-2012-2020

•Import (smaller, larger, irrelevant)Import and export: Three different scenarios were outlined, a smaller, a higher, and a minimal rate of import.

•Typical capacity addition (coal-fired, gas-fired, nuclear)The possible alternatives of the nuclear power plant of Paks were also examined in different scenarios: the prolongation of the NPP’s operation, the fuel switch to gas/oil power plant, and a fuel switch to coal power plant.

•We assumed that the capacities replacing old ones or being installed as new ones always use the most up-to-date technologies available. •Renewable energy utilisation was considered

The following charts present the emissions of the capacities to be installed in Hungary in the respective scenarios over time. These are just the major scenarios. An overview of their relation to

Coal PP

Lignite PP

Nuclear PP

Gas PP

Chart 3.28 Emissions from power sector, large demand, large import, oil-gas extension

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Chart 3.29 Emissions from power sector, large demand, large import, nuclear extension

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Chart 3.30 Emissions from power sector, large demand, large import, coal extension

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ScenarioEstimatedemissions Kyoto commitments

Scenario 1 Base 19,53Scenario 2 Nuclear additions 12,53Scenario 3 Coal additions 27,68Scenario 4 Base 22,91Scenario 5 Nuclear additions 15,82Scenario 6 Coal additions 35,15Scenario 7 Base 17,31Scenario 8 Nuclear additions 10,02Scenario 9 Coal additions 23,57Scenario 10 Base 20,63 22,51Scenario 11 Nuclear additions 13,68Scenario 12 Coal additions 30,26Scenario 13 Base 21,29Scenario 14 Nuclear additions 14,15Scenario 15 Coal additions 30,59Scenario 16 Base 24,39Scenario 17 Nuclear additions 17,13Scenario 18 Coal additions 37,33

Table 5. The Kyoto commitments and the emissions in various scenarios in 2012(Mt)

•As it was expected, the power sector has a large potential of emission savings, and is able to balance up other sectors of the country if the proper development and extension plan is taking place. A warning sign is however that a larger demand growth and a limited import of electricity can lead near to the commitments

Conclusions for the emission scenarios

Renewable energy utilisation in 2003

Type of renewable energy sourcesElectricity ThermalGWh TJ TJ

Hydro 186 670Wind 0.92 3.3Geothermal 3,600Solar thermal 56Photovoltaics 0.06 0.22Wood 24,000Other solid waste 3,000Landfill gas 2 7.2 12Sludge/sewage gas 7.6 27.4 120Heat pump 40Biomass (vegetal waste) 4,870Waste incineration 112 403 480Subtotal 309 1,111 36,178Total (TJ) ~37,000

(Bohoczky 2001, Ministry of Economy and Transport 2003)

Percentage of different renewable energy sources in thermal heat (2001)

Wood67%

Biomass (vegetal waste)14%

Waste incineration

1% Geothermal10%

Other solid waste

8%

Source: Diana Urge-Vorsatz, 2003

Measures for supporting renewables in Hungary

In Hungary, the expression ‘utilisation of renewable energy sources’, as a principle of energy policy, appeared only in 1993 when the Parliament approved the new energy policy objectives (Parliament Resolutions 21/1993 (IV.9). Later these principles were confirmed by the Government Resolutions 2199/1999 (VIII.6.), which established the base of liberalisation of energy market and also emphasised the role of renewables in energy production.

Direct investment support The legal background for the support of renewables is based on the Energy Savings Strategy and Action Plan, approved by the Parliament in 1999 (1107/1999) and the Electricity Act (CX/2001). An important momentum is that this decree makes it possible for not only companies and municipalities but also the residential sector to apply for financial support. The financial background of the whole program was 1 billion HUF, 10 % of which was earmarked for renewables in 2000-2001.

Recommendations

• Give a clear indication on FiT system for investors: duration, price development. Give schedule for TGC introduction if any.

• Renewables cause higher risks for the grid operation and performance, this has to be considered and taken into account (increase margin reserves, etc)

• Due to the strategical importance of the area, research and attention to be paid for more precise analysis

• Increasing of awareness and conciousness is necessary

• Lack of official wind-map makes investment in WP hard

• Governmental action and regulatory steps are needed to be taken