European Commission supports three Hungarian energy programs from the Modernization Fund

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The European Commission decided to support three Hungarian energy programs through the EU’s Modernization Fund, announced Hungary’s Ministry of Energy. Two calls for proposals aimed at renewing and greening district heating systems, and one to promote the establishment of energy communities, are expected to be launched this autumn.

These programs will contribute approximately 100 billion forints in investments to the increased utilisation of renewable energy sources and the fulfilment of climate neutrality commitments according to the ministry.

The largest amount of funding, including domestic co-financing, amounts to approximately 50 billion forints and is intended to facilitate the transition of district heating producers to green technologies. The revised National Energy and Climate Plan of Hungary aims to achieve a 29 per cent share of renewable energy in final energy consumption by 2030, up from the current 21 per cent. The planned program supports the switch of existing systems to renewable sources (e.g., geothermal or biomass) and the interconnection of isolated district heating networks and the application of innovative, digital solutions.

The second district heating grant, amounting to approximately 44 billion forints, primarily focuses on energy efficiency developments in the sector. The domestic heat loss of systems in Hungary aligns with the EU average at 10-12 per cent. The forthcoming program will support the reconstruction and insulation of pipelines, modernization of distribution systems and network parts directly serving consumers. It could also contribute to the construction of new pipeline sections if necessary for the integration of renewable heat production. These interventions aim to reduce network heat and water losses, improve capacity utilisation, and enhance service quality to end-users without expanding existing heat production.

An additional 5 billion forints will be allocated to stimulate the establishment of new energy communities. As the ministry underlined, locally utilising self-generated electricity reduces the load on the power grid and public utility costs. Collaborations among businesses, public, and non-profit organizations can facilitate the integration of weather-dependent renewables into the system. According to the grant conditions, at least two-thirds of the generated energy must be utilised within the energy communities. The establishment of 3-8 megawatts of new green energy production capacity will be supported by the installation of at least 50 energy storage units and 50 charging points for the local use of clean electricity.

Hungary’s Ministry of Energy has begun developing the details of the grant structures aimed at distributing the already awarded and transferred funds. The ministry expects that the investments will help Hungary meet its commitments to the share of renewable energy and emission reduction.

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