Hungary: vast untapped geothermal potential

Hungary: vast untapped geothermal potential

Hungary is located on a huge geothermal basin and already has a district heating infrastructure to provide clean energy to citizens. Yet despite this, the government is making no effort to tap into this potential, experts say.

Geothermal energy is a local, renewable technology that uses underground heat to provide heating, cooling or electricity to the surrounding area.

For countries like Hungary, which sits on the geothermally rich Pannonian Basin and already has Soviet-era district heating networks, geothermal energy is a clean and potentially inexpensive alternative to fossil fuels for heating.

“Due to its particular geological situation, Hungary has very favorable natural conditions for the production of geothermal energy”said Sandor Ronai, a Hungarian MEP from the Democratic Coalition party (Demokratikus Koalícíó), a left-wing federalist opposition party in Hungary.

“However, geothermal energy still plays an excessively small role in the Hungarian energy market”he added.

Today more than 650,000 Hungarian households are connected to district heating networks, the MP said. “These homes could all be heated by geothermal energy”he noted.

Kill four birds with one stone

The development of Hungary’s geothermal capacity would achieve four objectives at once: the gradual elimination of Russian fossil fuels, the creation of a stable and local energy resource, the reduction of greenhouse gas emissions ( GHG) and lower energy prices for consumers.

Hungary is particularly dependent on foreign energy supplies. It depends on Russia for 85% of its gas consumption.

Additionally, the country is landlocked, making it difficult to import alternative supplies like liquefied natural gas (LNG).

“In our opinion, geothermal energy could certainly help Hungary break away from Russia if it were a goal of our government. Especially if you consider that in Hungary, very many homes are heated with natural gas, so if we switch to geothermal heating, we will need less gas”Mr. Ronai said.

Today, geothermal energy represents barely 2% of Hungary’s heating needs and only about thirty Hungarian municipalities use it for this.

Lack of political will

The main obstacle is the lack of political will, which Ronai says is a more general problem of the current Hungarian government when it comes to renewable energy.

At the moment, Budapest is more focused on increasing the supply of fossil gas and nuclear power, with the ongoing construction of the Russian-built Paks 2 nuclear reactor, Ronai told EURACTIV.

“These only reinforce our dependence on Russia, which is unfortunately of obvious importance for the current pro-Russian government” of Budapest, he said.

These concerns are echoed by Mihály Kurunczi of the Hungarian thermal energy association MTT (Magyar Thermal Energy Tarsasag). He believes that the country’s vested interests in fossil gas are the main obstacle to the expansion of Hungary’s geothermal energy capacity.

“Here in Hungary, the government itself is in the gas business”Kurunczi told EURACTIV. “There are 21 gas trading companies in this small country, and the state has commercial interests in half of them”he pointed out.

To keep prices low during the gas crisis, Mr Kurunczi said the government had dedicated “a lot of political capital” energy price caps for households, which experts say could cost up to €3.45 billion in taxpayer contributions this year.

“From this point of view, it may not always be in the interest of politics to replace natural gas with locally produced energy”Mr. Kurunczi said. “So it’s obvious that if consumers take their destiny into their own hands, they won’t be so dependent on natural gas, and they may also think differently.”he added.

The great geothermal potential of Hungary

Currently, Hungary uses about the same amount of extracted water in its 260 spas for therapeutic purposes as for thermal energy.

Experts estimate that around 80 to 90 million cubic meters of thermal water with a temperature above 30°C are extracted each year in Hungary from depths between 300 and 2,500 meters.

About a third of this water is cooled and used as drinking water, another third is used in the 260 famous spas in the country and the rest is used for its energy potential.

This represents just under 0.4% of the country’s total annual primary energy demand, or about 1.5% of its heating energy needs.

At the same time, modeling undertaken by MTT suggests that Hungary could mobilize around 380 to 400 million cubic meters of thermal water per year.

Associated with the use of heat pumps, the share of geothermal energy could reach 10% of Hungary’s energy supply and a quarter of its heating needs, estimates the association.

Investments are possible

The level of investment required to achieve the benefits of greater use of geothermal energy would be achievable, according to a 2019 proposal from the Association of Renewable Energy Organizations (MESZSZ).

“Public investment is clearly needed for conversion to district heating, but even for houses with individual heating systems, significant public support is needed due to the high investment costs”Mr. Ronai said.

“Although cheaper in the long term, without public subsidies and incentives, the investment costs are so high that most households cannot afford to switch to geothermal heating”he added.

According to their calculations, with an annual investment of around 61.3 million euros (24.75 billion HUF), Hungary could achieve 53 petajoules per year (PJ/year) of thermal energy from geothermal sources in forty year. This represents a total investment of around 2.45 billion euros over four decades, according to expert estimates.

However, in the latest public version of the Hungarian post-Covid recovery plan, which could allow Budapest to receive 7.2 billion euros in subsidies and 9.6 billion euros in reimbursable aid, geothermal energy is not mentioned only three times.

Hungary’s recovery plan is currently blocked by the European Commission on grounds of respect for the rule of law in the country, and there are no indications that this impasse will soon be overcome.

“The Hungarian state must set more ambitious targets for both renewable energy and energy efficiency. Without the right incentives and adequate financial support, geothermal energy will not be able to develop”Mr. Ronai said.

EURACTIV has repeatedly contacted the relevant ministries, but has yet to receive a response as to why geothermal energy is not benefiting from higher levels of investment.

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