Introduction of the energy policy directives of the EU in Hungary

Balatongyörök, 26 March 2009

Dr. Péter GordosSecretary of State

Ministry of Transport, Telecommunication and Energy

Content

I. Energy strategy of the EU

II. Major challenges of the Hungarian energy policy

III. Hungarian measures

Energy strategy of the EUon the basis of the Second Strategic Energy Review

The Commission proposes a „Safety and Solidarity Action Plan” in the following five areas:

infrastructure and supply diversification;energy foreign relations;establishment of crude oil and natural gas

stocks;energy efficiency;better utilisation of resources within the EU

I. Priorities of infrastructure development and supply diversification

Construction of Southern natural gas corridor (Nabucco); LNG (liquefied natural gas) Action Plan; Development of North - South interconnection of the natural

gas and electric energy network of South-Eastern Europe; Baltic Interconnection Plan; Mediterranean Energy Ring; Offshore Wind Energy Network on the North Sea

II. Development of foreign relation in the field of energy policy

Reliable partnership with the transporter and transit countries;

On the basis of the acquis communautaire and the Energy Charter;

Renewal of partnership cooperation with Russia;

„Speaking with one voice”;

III. Establishing crude oil and natural gas stocks

Revision of 2006/67/EC Directive: strengthening the obligation on Member States to maintain minimum stocks of crude oil and/or petroleum products ;

• Revision of 2004/67/EC Directive: strengthening measures to safeguard security of natural gas supply and the obligations on Member States to maintain minimum stocks of natural gas;

IV. Energy efficiency package

Review of the following directives, broadening of product range and stricter conditions

Energy labeling of energy consuming products;

Energy efficiency of buildings;

Eco-design;

Cogenerated heat and energy production

V. Better utilization of resources within the EU

Proportion of renewable energy sources should be increased to 20% in the European Union by 2020;

Use of hard coal; Crude oil, natural gas, peat; nuclear energy;

More efficient utilization of reserves / increase of proportion

Content

I. Energy strategy of the EUII. Major challenges of Hungarian energy

policyIII. Hungarian measures

Major challenges in the field of energetics

Energy import dependency – safety of supply; Energy prices – competitiveness; Through the role of the state, energy efficiency can be

improved and the use of renewable energy can be increased – sustainability;

To create harmony with the evolving community energy policy and to influence it according to domestic interests.

Safety of supply

To maintain and improve continuous and safe energy supply.

Energy resource - structure Energy import

diversification Strategic energy resource

reserves

Objective Subareas

Competitiviness

Energetics should contribute to the improvement of Hungarian competitiveness

Liberalized energy markets, Energy prices, social

benefits Up-to-date distance heating

Objective Subareas

Sustainability

To implement the principles of sustainable development

Energy efficiency, conservation

Renewable energy sources

Objective Subareas

Content

I. Energy strategy of the EUII. Major challenges of Hungarian energy

policyIII. Domestic measures

Safety of natural gas supplyExtending storage capacity

The establishment of the minimum stocks of natural gas should be continued according to the original plans, thereby the Hungarian stocks of natural gas will increase to 1,2 billion m3 from the presently available 500 Mm3 by the end of the year;

According to the known investment plans, the capacity of commercial storages will grow from the present cca. 3,7 billion m3 to 4,1 billion m3 in 2010, and to cca. 4,8 billion m3 in 2011;

Parallel with this, the present 53,2 Mm3/day capacity of commercial storages will increase to 62,2 Mm3/day in 2011.

New transport routesIn order to diversify the resources, the establishment of alternative gas transmission routes should be continued, either in the case of the Nabucco, or the Southern Stream pipelines or the LNG terminal.

System connection Hungary as centre of distribution; NETS program; Croatian-Hungarian, Rumanian-Hungarian, Slovakian-Hungarian system

connection pipelines;

Aid to the coal industry

Strengthening the energy safety of the European Union through the utilization of domestic primary energy sources could justify the maintenance of coal production facilities.

In 2005, Hungary submitted a restructuring plan of the coal mining industry to the European Commission in compliance with Council Regulation (EC) No 1407/2002 on State aid to the coal industry.

The contingency plan includes detailed measures for the period 2004-2014. Regarding the fact that Council Regulation 1407/2002/EK shall apply until 31 December 2010, the Commission acknowledged the Hungarian declaration but approved it until 31 December 2010.

Capacity of nuclear power plantsExtension of the time in service of the Paks Nuclear Power Plant

Submission of Programme: four years prior to the expiry of the planned time in service at latest (by 15 December 2008)

Paks Nuclear Power Plant Zrt submitted the Extension Programme to OAH-NBI on 14 November 2008.

Request of Operation Licence: one year prior to the expiry of the valid operation licence of the planned time in service

Governmental decree proposal no. H/9173 on new blocks 11 March 2009. – the government adopts the ministerial proposal on new nuclear

power plant blocks; 13 March 2009. – the Ministry of Transport, Telecommunication and Energy submits

the proposal for decision no. H/9173 to the Parliament; 18 March 2009. – the Economic and Informatics Commission unanimously supports

our parliamentary proposal for decision no. H/9173; 30 March 2009 – the Environmental Protection Commission discusses the proposal

for decision and the plenary session is expected to start next week - general debate

Energy efficiency

The government has adopted the National Energy Efficiency Action Plan[2019/2008 (II. 23.) gov.decree]

Impacts of energy efficiency

Decreasing import dependency; Improvement of environment and awareness raising; Decreasing energy prices of the population;

Funds for supporting energy efficiency investments

Energy Efficiency Credit Fund; Panel Program; ECO Program; National Energy Efficiency Program (NEP); Environmental and Energetics Operative Program (KEOP); Planned Green Investment System;

Renewable energy sources The proportion of renewable energy sources will be increased to 13 % in the energy consumption of

Hungary by 2020; By 2013, about 100 billion HUF for renewable energy sources and energy efficiency in the Environmental

and Energetics Operative Program (KEOP); the source of the other programs yet uncertain; On 4 September 2008, the government adopted the Strategy to increase the utilisation of renewable

energy sources.

Table of results of the POLICY scenario (PJ)

Total renewable energy consumption 2005 2010 2015 2020

Total 49,92 103,66 149,54 186,28

Bio fuel 0,21 10,46 16,27 19,55

Total (without bio fuel) 49,71 93,20 133,27 166,73

Hydro energy 0,73 0,71 0,79 0,88

Wind 0,04 2,02 4,04 6,12

Solar energy (solar panels+ collector) 0,08 0,53 1,10 1,66

Geothermic 3,63 5,60 8,40 11,36

Biomass 43,56 78,08 107,04 130,81

Biogas + bio methane 0,30 3,90 9,06 12,57

Renewable waste 1,38 2,35 2,84 3,33

Thank you for your attention

www.khem.gov.hu