The Issue of Regulated Gas Tariffs in Hungary

In this post we go around the politically charged topic of regulated end-user gas tariffs in Hungary, looking at the topic from three angles.

1) We attempt to shed some light on the real market price situation, coming to a conclusion that an open, competitive market pricing is a better option.

2) However, as energy poverty is a large problem in the country, some subsidies needs to be provided to the poor, so much so that we argue that for the ones in dire need, some quantity of gas free of charge could be a good idea, because it could drive people away from dirty fuels as well as serve as a good vehicle to reach out for these people with energy efficiency programs.

3) The strategic storage is financed solely by the business customers in Hungary, adding to their gas bill a total of EUR 55 million per year. This is hurting competitiveness. And we think that we could live without this storage as the risk of such a crisis is getting lowered with imminent EU regulation on the issue, less consumption, and more interconnectivity in the region. Hungary should scrap its strategic storage for good.

The full article is available in Hungarian. Please switch languages for access: 

Are Renewables Really Cheaper Than Conventional Power Generation?

How much does a new power plant cost? And how much will the power cost generated by it? There is much talk about the rise of renewables (by getting cheaper while nuclear getting more expensive) over the last decade, but what do the numbers show to us? We did the maths to shed some light on the real costs of both the renewable and conventional power plants.

(title: Total Cost of Energy of Various Power Plants, EUR/MWh)

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Corporate Income Tax Benefit for Energy Efficiency Investment in Hungary

According to Section 22/ E of the Act on Corporate and Dividend Tax of Hungary, the corporate taxpayer may benefit from tax relief when implementing an investment for energy efficiency enhancement purposes. This may entail any purchase of new equipment, machinery or other asset, switching to a more efficient one or carrying out a refurbishment of existing asset or building. The tax return can reach as high as 65% of the capital expenditure. All details in our article. (more…)

The Unbearable Needlessness of Nord Stream 2

The article points out the following:

  1. The planned Nord Stream 2 (NS2) pipeline would be a redundant gas transmission infrastructure for Europe.
  2. The Russians are presumably having political motivation behind, Central-Eastern Europe (CEE) are set to lose out by reduction of the alternative sourcing possibilities vis-à-vis Russian gas because of the elimination of the Ukrainian transit route.
  3. Gazprom is lining up considerable energy, funds and international support beside NS2. Adjacent pipline capacities from Germany down to Slovakia have beened reserved for 20 years at immense cost, the pipes are being built.
  4. The stakes are high, CEE, thus Hungary needs to have a Plan B.

We further argue that

  • EU Commission should obtain the requested mandate to negotiate the case with the Russian side, with the strong instruction that Nord Stream 2 shall only be commissioned in case of the cessation of Gazprom’s Russian gas export monopoly status. This could prevent the elimination of the transit route through Ukraine
  •  In case Nord Stream 2 is likely to be built in its current form and regulatory context, CEE (and Hungary) needs to reach out for and start developing the alternatives: Croatian LNG and adjacent pipe development, pipeline development from the direction of Romanian production (BRUA corridor), Polish-Slovakian interconnector. It’s important to point out that some of these investments (e.g. the LNG terminal) could be forgone in case of the continuation of Ukrainian transit flows, but NS2 poses too large of a risk. Especially for Hungary, where the extended long term contract is to expire at the end of 2019, the planned date for NS2.

The whole article is only available in Hungarian yet. To switch languages, click here: 

 

Everything You Always Wanted to Know About Balancing Energy* - Part 3

We now know what balancing energy is, how it is provided, who provides it, who controls it, who uses it and what other basic system design elements influence its overall usage. There’s nothing else left than taking a deep dive down the rabbit hole of the methodology of its calculation in our selected three countries. Similarly to Alice, we shall be rewarded with the opportunity to explore a wonderland where it is really easy to lose track of time and space. (more…)

Introduction to Heat Pumps. Technical Description (Part 1/2)

The concept of heat pumps is an emerging technology with a promise of radical increase of energy efficiency (and sustainability) in space heating (and cooling) – an area with immense energy consumption as well as possibilities. Heat pumps are able to multiply the amount of energy in input electricity while creating output heat (or cooling) energy – not by bending the laws of physics, but by harvesting the vast ‘invisible’ energy all around us. Read about the details in our first article of our series.
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