Hungary at the Crossroads: Exploring Future Pathways for Hungary’s Power System

Hungary’s power system has undergone a stunning transformation in the last 10 years.

In 2017, the share of solar power in the electricity mix stood at only a few percent — today, during a growing number of hours of the year, the share of solar power surpasses 50%. The amount of solar installed has grown to over 8GW in a power system with a total installed capacity of just over 16GW. Remarkably, a substantial share of the total solar capacity is found on rooftops and farms across the country, as homes and businesses have tried to insulate themselves from volatile prices and unreliable energy imports in the wake of Russia’s invasion of Ukraine.

Today Hungary stands at a crossroads. 

The previous Fidesz Government had set out plans to increase the country’s reliance on new gas plants and to double-down on nuclear power.

And yet, with a power system now strongly shaped by solar power, and a string of battery storage projects expected to come online in 2026 and 2027, the economics are unlikely to support either option: solar is already coming into conflict with baseload nuclear, and battery storage is likely to erode the price spreads on which the economics of new gas plants are based.

Another path exists, as countries like Spain are starting to show: Hungary could pursue a path built around local renewables backed by local storage capacity instead, expand its interconnectors with its neighbours, and reap the benefits of a more secure, flexible, and affordable electricity system.

For the full slide deck report, see (PDF).