Nuclear power to support future growth in Hungary's energy consumption

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7 July 2014, Nuclear, Solar, Wind

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While conventional thermal fuels will continue to play an important role in the country's energy production, bioenergy and wind power are emerging as increasing sources of power. In addition, geothermal generation is forecast to start in Hungary in 2014 and rapidly increase in the coming years, albeit from a low base. Renewable energy is anticipated to make up 5% of Hungary's energy supply this year and is forecast to grow to 13.5% by 2030.

Natural gas energy production has diminished in the last six years. One of the contributing factors was the closure of a natural gas plant in Tiszaujvaros in 2012, and it is anticipated that further gas power plants will be mothballed over the next four years due to financial difficulties.

Energy production from coal-fueled power stations remains very cost-effective and efficient at generating power, and moving away from the black fossil fuels will prove to be a difficult habit to break for Hungary and most other countries around the world.

On the consumption side, there was a notable decline in energy demand in Hungary's commercial sector between 2012 and 2013. Financial turmoil and the slowdown of several key European countries, particularly in Southern European, have adversely affected the commercial sector. Nonetheless, the sector is expected to rebound strongly as the number of new planned commercial buildings is predicted to quadruple in the next 15 years according to Hungary's statistics department.

Hungary's industrial markets remain the largest segment for energy consumption, using more than double the commercial sector and almost 50% more than the residential sector in 2013. The primary reason for Hungary's high industrial energy consumption is its heavy raw material and construction markets, particularly in the production of cement and steel.

Overall energy demand in Hungary is projected to grow steadily over the coming five years and longer term. Datamonitor Energy forecasts the country's energy consumption will record a compound annual growth rate of 2.1% from 2014 to 2030.

Hungary also plans to address its heavy reliance on energy imports from abroad. Presently, almost a third of its energy supply comes from net imports, and this will remain the case until the country brings its additional atomic energy production facilities online in the coming decade. Introducing more energy efficiency policies and reducing distribution losses will be key to limiting its dependence on foreign energy.

www.datamonitorenergy.com / asken@datamonitor.com / @DatamonitorEN

Source: MarketLine

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