Page 54 - CE Outlook Regions 2023

Nuclear authority OAH gave the final licence to Russian state energy
giant Rosatom to build two 1,200 MW reactors in Paks for €12.5bn,
financed by a €10bn Russian loan. The government expects the two
new blocks to go online in 2030, a five to six year delay compared to
the initial 2024-2025 schedule. After winning a fourth straight
supermajority win, the government accelerated the largest investment
on record even as many analysts questioned the viability of the project
in view of the sanctions against Russian companies.

The spread of renewable energy continued in 2022. Hungary’s built-in
solar energy capacity rose to 3,400 MW in the first half, up from 2,950
MW at the end of 2021, and accounted for 14% of electricity generation
in 2021. Capacities are set to reach the 6,500-MW target, set by the
government in its energy strategy, years before the 2030 deadline when
some 90% of the country’s electricity production could be carbon-free.

Hungary imports about 95% of its gas and 45% of its oil and petroleum
products from Russia. These shares are expected to remain unchanged
because of the exemptions from EU sanctions. State-energy MVM
received deferred payments for gas supplied by Gazprom that eased
pressure on Hungary’s widening current account deficit and its
currency, which plunged to historic lows in October.

In the wake of the energy crisis, the government signalled plans to
spend €16bn in investments on the electricity system by 2030, much of
this to be financed from the RRF.

Citing the lack of grid capacity, MVM suspended taking over solar
energy produced by households, a blow to tens of thousands of
households scrambling to find cheaper alternatives after the
government scaled back retail energy subsidies.

The overhaul of the energy subsidy system, pushing up gas and
electricity bills by 30-50% for some households, triggered an upswing in
energy efficiency investments, including solar panels. Over the years,
regulated energy prices did not provide incentives for these
investments.

Hungary aims to reduce its gas consumption by 2030 to cover a quarter
of its needs from domestic sources and cut off gas imports entirely from
Russia by 2050, according to government projections. Natural gas
accounts for 44% of the country’s energy usage, including electricity
production and district heating.

3.3.5 Construction

Much like the retail sector, the construction industry got a boost from
the government’s pre-election stimulus in H1, but output slowed in the
second part of the year as energy prices and construction costs climbed
upward. The sector reported double-digit growth in 10 out of 13 months
before June 2022.

54 CE Outlook 2023 www.intellinews.com