1 Hungary | Country reports

HungaryEnergy efficiency report

Objectives:

– 9% of end-user energy savings by 2016 (1.4 Mtoe) –14.6%shareofrenewablesinfinalenergyconsumptionin2020– 10.9% share of renewables in electricity production in 2020

Overview 2009 2000-2009 (% / year)

Primaryintensity(EU=100)1 121 - -2.2% +CO2intensity(EU=100) 111 - -3.2% +CO2emissionspercapita(intCO2 / cap) 4.9 + -0.8% -Power generation 2009 2000-2009 (% / year)Efficiencyofthermalpowerplants(in%) 33 - 0.9% +Rate of electricity T&D losses (in %) 9 -- -4.0% ++CO2emissionsperkWhgenerated(ingCO2 /kWh) 307 + -3.2% ++Industry 2009* 2000-2009* (% / year)Energyintensity(EU=100) 82 ++ -2.9% +ShareofindustrialCHPinindustryconsumption(in%) 3 -- -5.8% --Unitconsumptionofsteel(intoe/t) 0.43 + -3.4% +*2008 and 2000-2008 for steel

1 TheEuropeanUnion,asthebest-performingregion,isusedasthebenchmark.

Latest update: January 2011

++ Amongbestcountries + BetterthantheEUaverage - BelowtheEUaverage -- Amongcountrieswithlowestperformances

Country reports | Hungary 2

1. Overview1.1. Policies: 1.4 Mtoe energy savings target for 2016Hungary’s National Energy Efficiency Action Plan for the period 2008-2016 lays down a final energy savings target of 9 percent between2008and2016,ie,1.4Mtoe(15.9TWh).Around40to50percentoftheplannedenergysavingsshouldcomefromthe households and services sectors (equally split between thesetwosectors),industryshouldaccountforafurther40-50percent of the savings and transport for 10 percent. According tothenewRenewablePlanadoptedinJanuary2011,by2020energysavingsshouldamountto10percent.

AccordingtotheEUDirectiveonthepromotionoftheuseofenergyfromrenewablesources,thenationaltargetistoincrease the share of renewables in the country’s final energy consumptionto13percentby2020;thattargetwasreas-sessed in the new Renewable Plan adopted in January 2011 and is now 14.6 percent by 2020.

1.2. Energy consumption trends: little change since 1990Hungary’senergyconsumptionpercapitais25percentbelowthe European average (2.5 toe/capita in 2009).

Totalenergyconsumptionhasremainedrelativelystablesince1990.Afterafallbetween1990and1992,primaryenergyconsumptionincreasedslightlyuntil2005andhasbeendeclin-ing since then. In 2009 alone it decreased by 6 percent as a consequenceoftheglobaleconomicslowdown.

Oil and nuclear electricity represent 28 percent and 16 percent oftotalconsumption,respectively.Theshareofcoalhassteadilydecreasedandnowaccountsfor10percent,com-paredwith20percentin1990,tothebenefitofnaturalgas(37percentin2009comparedwith32percentin1990).Othersources(includingbiomass)accountfor7percentoftotalconsumption(2009).

Source: Enerdata

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Figure 1: Total and final energy consumption trends

The households-services sector absorbs 47 percent of final energyconsumption,followedbythetransportsector,whichhasseenitssharegrowonaregularbasissince1990(from14percent to 24 percent in 2009). The share of industry (including non-energyuses)accountedfor28percentoffinalconsump-tionin2009,downfrom39percentin1990.

Source: Enerdata

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Hungary’selectricityconsumptionpercapitaisabout40percentlowerthantheEUaverage(3,500kWhin2009).Afterafallbetween1990and1993,electricityconsumptionroseby1.8percent/yearupto2008.In2009,electricityconsumptionfellby5.4percent,inlinewiththereductionindemandfromindustryandfromthehouseholds-servicessector.Thehouse-holdsandservicessectoristhelargestelectricityconsumerinHungary,with63percentofelectricityconsumptionin2009(comparedwith50percentin1990),anditsshareisincreas-ing.Theshareofelectricityconsumedbyindustryfellovertheperiod,from46percentin1990to34percentin2009.

Figure 2: Distribution of final energy consumption by sector

3 Hungary | Country reports

HungaryEnergy efficiency report

Source: Enerdata

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Figure 3: Electricity consumption trends by sector

1.3. Energy efficiency and CO2 trends: significant energy intensity reduction TotalenergyconsumptionperunitofGDP(primaryenergyintensity) has decreased by 2.1 percent/year since 1990. This gaininoverallenergyefficiencywasfasterthantheimprove-mentintheEU(1.7percent/yearbetween1990and2009),butHungary’sprimaryenergyintensity,measuredatpurchasingpowerparity,remains20percenthigherthantheEUaverage. Hungary’sfinalenergyconsumptionperunitofGDP(finalintensity) decreased by 2.3 percent/year between 1990 and 2009,thankstoefficiencygainsintheindustrialsector.Owingto the high share of low-efficiency power plants in electricity production(over80percentbetween1990and2000),theseefficiencygainswereonlypartiallytransferredtotheprimaryenergy intensity. Efficiency gains in the power sector since 2000(replacementofoilandcoal-firedfacilitiesbygas-firedunits)contributedtothereductioninprimaryintensitybetween2000 and 2009.

CO2 intensity (CO2emissionsperunitofGDP)droppedby2.9percent/yearbetween1990and2009,ie,slightlyfasterthanprimaryenergyintensity,duetotheuseofalternativelow-car-bon fuels. Fuel substitutions account for about 20 percent of thatreduction,whilethereductioninenergyintensityexplainstheremaining80percent.

Source: Enerdata

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Final energy intensityCO2 intensity

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Figure 4: Energy and CO2 intensity trends

2. Power generation2.1. Policies: 9.5 TWh of renewable electricity by 2020Hungary’s strategy on renewable energy sources 2007-2020 aimstoincreasethepowerproductionfromrenewableener-giesto9.5TWhby2020.InthenewplanonrenewablesadoptedinJanuary2011,atargetof10.9percentoftotalelectricity production was set for renewables by 2020. To improveCO2emissions,newdevelopmentsinthecountry’snuclear capacity are under consideration.

In 2003 Hungary introduced feed-in tariffs for electricity pro-ducedfromPV,wind,biomassandbiogas,andsmallhydro.Feed-in tariffs can be applied to CHP installations. The govern-mentisintroducinggreencertificates,whichwillbemandatoryforpowerproducers(fromCHP)andsellersfromJan.1,2012.Thissystemcouldlaterreplacethefeed-intariffforRenewableEnergy Resources (RES)-electricity.

InvestmentsinrenewableenergyaresupportedthroughgrantsbytheEnvironmentProtectionandInfrastructureOperativeProgram(EIOP).AsplannedintheNationalEnergyConserva-tionProgram2008(NEP2008),investmentsinfacilitiespro-ducingelectricityfromrenewablesareeligibleforsubsidiescovering25percentoftheinvestment.

2.2. Power generation trends by source: nuclear and thermal Hungary’selectricitymixisdividedbetweennuclearpower(43percentin2009,comparedwith48percentin1990)andthermalgeneration(49percentin2009,comparedwith51percentin1990).Withinfossilfuels,theshareofnaturalgasinpowerproductionhasrisensteadily,from16percentin1990to38percentin2008,whilethesharesofcoalandoilhavedecreasedsteadily,from30percentand5percent,respec-tively,to18percentand2percent.In2009,thelowerelectric-

Country reports | Hungary 4

itydemandalteredthefuelmixtothebenefitofnuclearenergy.Biomass-firedgenerationnowaccountsfor7percent(com-paredwith1percentin2003)andwindremainsmarginal(1percent).

Figure 5: Power generation by source

2.3. Efficiency of the power sector: low, but improving TheefficiencyofthepowersectorinHungaryispoor,sincelow-efficiency technologies (nuclear and coal-fired power plants)dominatethepowermix.However,theelectricitysectorhasimproveditsefficiencyovertheyears,from29percentin1990to33percentin2009,thankstoefficiencyimprovementsinthermalpowerplants,anincreasingshareofCCGTfacilitiesinthethermalmix(from8percentin1990to18percentin2009) and a shift to gas.

Source: Enerdata

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Figure 6: Efficiency of power generation and thermal power plants

Source: Enerdata

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Figure 7: Thermal electricity capacity, by technology

TherateofT&Dlosseswasslightlyabove9percentin2009,ie,43percenthigherthantheEUaverage,despiteasignificantdecrease since 1993 (– 40 percent). Those losses were over 13 percentbetween1993and2001,andweremainlyduetoelectricitytheftratherthantechnicalproblems.

Source: Enerdata

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Figure 8: Electric T&D losses

The average CO2emissionfactorforelectricitygenerationfelldramaticallybetween1993and2009,fromaround440gCO2/kWhto310gCO2/kWh,andisnow9percentlowerthantheEUaverage(340gCO2/kWh).Thisimprovementisduetothedecliningshareofcoal-firedandoil-firedgeneration,tothebenefit of gas-fired generation. The high share of nuclear also helpslimitCO2emissions(theincreaseinthecarbonfactorin2003islinkedtoadropinnucleargeneration).

Source: Enerdata

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5 Hungary | Country reports

HungaryEnergy efficiency report

Source: Enerdata

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Figure 9: CO2 emission factor for power generation

3. Industry3.1. Policies: up to 7.8 TWh in savings by 2016The National Energy Efficiency Action Plan sets an energy savingstargetfortheindustrialsectorofbetween5.6TWhand7.8TWhover2008-2016.Toreachthatgoal,Hungarywillcontinue the Energy Efficiency Credit Fund included within the Poland and Hungary Assistance for Restructuring their Econo-mies(PHARE)programsince2000,whichincludesasoft-loancreditfacilitytosupportenergy-efficiencyinvestmentsbysmallandmediumenterprises(mainlyfortheinstallationofCHPunitsandthereconstructionofheatingsystems).ThePHAREprogramcouldsave1.4-1.6TWhby2016.TheEnvironmentandEnergyOperationalProgram(KEOP),whichaimstoreduceenergyuseinindustrialbuildingsthroughsubsidiesforsmallandmediumenterprises,couldhelpsave1.9-2.2TWhby2016.

Since2008,largeenergyconsumersintheindustrialsectorhavebeenobligedtoemployenergymanagersandtodeliveranenergyconsumptionreport,followedbyanenergysavingsplanandimplementationreport.Thesetwomeasuresareexpectedtosave0.8-1.5TWhby2016.In2008,voluntaryagreementswerelaunchedintheenergy-intensivesectorstargetingareductioninenergyuse,theapplicationofmoreefficienttechnologiesandthedevelopmentofproductswithhigher energy efficiency indicators.

In2003,afeed-intariffschemeforCHPinstallationswasadopted,includingindustrialcogenerationfacilities(notbelongingtothedistrictheatingnetwork)under50MW.Indus-trialcompaniesthatinstallCHPfacilitiesorrenewablesystemscanbenefitfromsubsidies,asestablishedintheEnvironmentProtectionandInfrastructureOperativeProgram(EIOP).

3.2. Energy consumption trends: declining energy con-sumption in industry Energyconsumptioninindustrywashalvedbetween1990and

2009.Industrialconsumptiondroppedby33percentbetween1990 and 1992 and has declined by 1.8 percent/year since then.

Source: Enerdata

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Figure 10: Industrial energy consumption

Theshareofnaturalgasintheenergyconsumptionofthein-dustrial sector has decreased steadily since 1990 (49 percent) and now stands at 36 percent. Electricity represents 25 per-centoftheenergyconsumptionofindustry,upfrom18percentin1990.Biomassandcoalconsumptionhaveincreasedovertime,reaching4percentand19percent,respectively,in2009.Oilrepresentsjust6percent,comparedwith14percentin1990.

The share of energy-intensive industries in industrial energy consumptionisaround60percentandhasbeenrelativelystablesince1990.In2008,steel,chemicalsandnon-metallicmineralseachaccountedforabout20percent(18percent,19percentand20percent,respectively).Theshareofpaperislow at 5 percent.

Source: Enerdata

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Figure 11: Energy consumption of industry, by source

Country reports | Hungary 6

3.3. Energy intensity trends: noticeable energy efficiency improvementBetween 1992 and 2008 industrial energy intensity decreased by6percent/year.Thatimprovementwasduetoefficiencygainsinthesteelsector(-5.4percent/year),butalsotochang-es in the structure of industry (rising share of industrial branch-es with lower energy intensity). The increases in the specific energyconsumptionofotherenergy-intensiveindustrieshavelimitedtheeffectoftheseenergyefficiencyimprovements.

TheshareofindustrialCHPintheelectricityconsumptionofHungarianindustryisfarbelowtheEUaverage(around3percentin2009comparedwith17percentintheEU)andhasbeen decreasing since 1996.

Between1992and2008theenergyintensityofthemanufac-turingindustry(ie,excludingconstructionandmining)fellsubstantially,by7.7percent/year.Thisimprovementwasduetoefficiencygainsintheindustrialbranches,butalsotochang-es in the structure of the industrial value added: the share of theequipmentsector-thebranchwiththelowestenergyintensity-inthetotalvalueaddedofmanufacturingincreasedby nearly 17 percentage points between 2000 and 2008. Structuralchangesexplainabout40percentoftheoverallreduction since 1992 and 30 percent since 2000.

Source: Enerdata

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Figure 15: Trend in energy intensity of manufacturing

and structural effect

AllinformationordataprovidedbyEnerdata,inanyform,isthepropertyofEnerdataandisprotectedineach country by national laws governing intellectual property.AllinformationordataprovidedbyEn-erdataiscopyrightprotected,inclusiveofmaterialappearinginahardcopyformatorelectronically.DataprovidedbyEnerdataarebasedoncompilati-on and analysis of the best sources in the industry. Enerdatahasagreementswiththoseproviderstouse and publish this data.

All pictures Copyright ABB

Source: Enerdata

*Including construction and mining

Total* Steel Cement PaperChemical

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Figure 13: Trends in the energy intensity of industrial branches

Source: Enerdata

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Figure 14: Share of industrial CHP in industrial consumption

Source: Enerdata

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Figure 12: Energy consumption of industry, by branch