Dr. Andor Nagy MP, Hungary Vice Chairman of the Environmental Committee

The Challenge for a European sustainable energy policy 2

I The year of crisis What is the impact of the crisis? Crisis are motivating the changes 3

II. The Hungarian energy sector 4

The two main characters of the energy sector 1./ total dependence on Russian import 2./ supporting system 5

III. The Hungarian energy dependence on import : the total energy dependence on import in Hungary more than 73% : more than 85%, according forecast of the accepted Hungarian Energy Policy 6

III. The Hungarian energy dependence on import In today's Russia, energy is itself the tool of influence. To use it the Kremlin needs three things: control over Russian energy reserves and production, control over the pipelines snaking across its territory and that of its neighbours, and long-term contracts with European customers that are hard to break. All three are in place. For all the talk of a common strategy towards Russia, the EU is divided and stuck for an answer. 7

III. The Hungarian energy dependence on import The Eastern and Middle European socialist inheritance 8

IV. The Hungarian energy supporting system What does it mean in the Hungarian reality? - The Hungarian state spend much more money to the social subsidies on energy as to the renewable energy : the total cost of the social subsidies in the energy prizes: more than 320 million EUR : the total cost of the subsidies of the renewable energy sources: 253 million EUR : the total cost of the subsidies of energy efficiency: 154 million EUR 9

V. The RES in Hungary 3 September in the Hungarian Government approved the Hungarian Renewable Energy Strategy ( ) 10

V. The RES in Hungary The share of RES in the gross final energy consumption was 4.3% in Today, the most important renewable energy source is biomass, representing 90% of all RES production Hungary has fantastic opportunities for the use of geothermal energy Breakdown of renewable energy sources in production 11

V. The RES in Hungary - Hungary is blessed with a wealth of natural resources for biofuel, biomass, biogas, geothermal, wind and solar energy - the share of renewables in the energy mix is relatively low at present - Hungary enjoys huge potential for renewable energy use, especially in the area of photovoltaic, biomass and geothermal energy production Maximum renewable energy potential (PJ) 12

V. The renewable energy in Hungary Hungary’s targets for renewable energy production 1./ RES in energy production %-16% 2./ Renewable electricity production PJ 3./ Renewable heat production PJ 13 Accessible targets by the Hungarian Energy and Environment Operation al Program ( ) Growth of the RES based elecricity production GW/ year Accessible targets the share of RES in the Hungarian energy consumption by the KEOP % 02,63,33,4

VI. Conclusions and recommendations - The EU target for Hungary 13% is achievable but more potential - As for Hungary it is a national interest to have a common European sustainable energy policy - More ambitious goals are needed at the national level 14

VII. What to do? 1./ More subsidies from state and EU Funds 2./ Remove administrative burdens in the permit process 3./ Enhance intensity of support 4./ Green card for buildings, fix price not just for electricity but also for biogas, heating and cooling from RES 5./ More support in R&D for RES 6./ Tax reduction for biofuels 15

VII. The result 1./ New technologies 2./ Innovation 3./ Creating added value and employment 4./ Reduction of CO2 emissions 16

Thank you for your attention! 17