Hungary Energy Market Overview Nuclear and Renewables

Hungary has made significant progress in adopting renewable energy technology

Nuclear power dominates Hungary’s electricity mix, contributing to around 45% of the country’s total electricity production.  Currently, Hungary produces its nuclear power from the four reactors in the Paks power plant, which is owned by the state – owned Magyar Villamos Muvek Group (MVM).  Hungary is investing in its nuclear infrastructure by building two new reactors, Paks II, and it is expected when the new reactors are operational in the mid-2030’s, nuclear output will account for 62% of Hungary’s electricity production.  In addition to large scale water cooled nuclear reactors used at Paks and Paks II, the Hungarian government has expressed interest in at least one additional small modular reactor (SMR), though the country has been vocal about not being the first to adopt the new technology until it has been proven.  Hungary has historically heavily relied on Russian energy imports, which account for approximately 80% of Hungary’s gas and 65% of its oil consumption.

Hungary has made significant progress in adopting renewable energy technology.  Solar power is the leading source of renewable energy in Hungary, with significant increases in solar photovoltaic (PV) capacity in recent years.  In 2023, solar power accounted for 88% of the country’s total renewable energy output.  Most of Hungary’s solar power plants are commercial sized, but thanks to EU and Hungarian renewable programs, such as National Energy, Climate Action Plan and RePower EU, solar investments are now supported for household consumers.  Chinese and South Korean companies account for a majority of the photovoltaic products found in Hungary, but due to security concerns, there is increasing demand to source solar inverters from western countries.

Wind energy has significant potential in Hungary, and the country has recently taken steps to increase its use.  As of January 1, 2024, the Hungarian government made it easier to install wind turbines, however the regulation does not allow the new wind plants to start operation until the end of the decade.  The Transdanubia region of Hungary is particularly favorable for wind energy production.

Hungary has the largest geothermal system in the EU, providing heat and hot water to more than 27,000 households and 400 public buildings.  The potential for geothermic energy production is enormous, with reports that Hungary’s energy needs could be supplied through geothermal production alone.  However, cost constraints are a major hurdle for implementing Geothermal energy production on a large scale in Hungary.

There are opportunities for U.S. companies that develop energy transmission and distribution systems and offer innovative and smart energy solutions.  Companies that build energy storage facilities, digitize electric systems and modernize grid connection capacities have the greatest opportunities.  CS Hungary recommends raising brand awareness through seminars such as Single Company Promotions (SCP) by targeting potential customers in Hungary’s electric power, utilities, and critical infrastructure industries.  Gold Key Service (GKS) would help to identify best partner prospects in the Hungarian market.  Participation in major trade shows, exhibitions and conferences in Hungary and in Europe are also highly recommended.

For more information, please contact Annamaria Demko: annamaria.demko@trade.gov.