The energy strategy in Hungary is changing: green investments can pull the economy
Decarbonisation, ie the reduction of net carbon dioxide emissions to zero, is expected to require an additional capital investment of EUR 150-20 billion in Hungary by 2050. The cost requirement is significant, but due to the positive economic effects, we are generating a positive return – this is the key finding of McKinsey’s successful analysis of “Climate-Neutral Hungary – Towards Decarbonisation”, which we report in detail in this article:
At the presentation of the report Levente Jánoskuti, McKinsey’s Office Manager Partner in Budapest stated that several sectors can contribute to the 5530 emissions target by 2030 at the same time. Among other things, energy efficiency, green hydrogen, electrification are areas where spectacular progress can be made. In addition to the implementation of climate targets, the green transition also has other positives, according to the report, one third of the Hungarian economy has grown through improved competitiveness, while decarbonisation may create 80,000-100,000 new jobs in the long run.
Levente Jánoskuti, McKinsey’s leading partner in the Budapest office, McKinsey Global Pricing Lab for the banking company and McKinsey’s digital digital for Central Europe
Next
Various aspects of the net zero switchover were discussed at the post-presentation roundtable discussion, where in addition to the advisory sector, the government, the banking sector and the energy supply market were also represented. Steiner Attila, State Secretary, Ministry of Technology and Industry emphasized that there is considerable potential for industrial development in climate change efforts. The Green Bus program, for example, has channeled several domestic manufacturing companies into this process through orders, but later batteries or green hydrogen-related developments may also contribute to the production of the domestic economy.
During the carbon-neutral transition, if the resources are used properly, the disadvantages associated with it can be minimized.
– said the Secretary of State, then emphasized that security of supply investments will also require significant funding, and in parallel to obtain funds for green investments.
The energy strategy needs to be reviewed in the light of the geopolitical situation. Security of supply aspects have now become much better. From a governmental point of view, the goal is security of supply, maintaining the right, competitiveness and, in addition, greening. You have to find a balance in this, you can’t concentrate.
he added.
Renewable energy and green finance will be the focus of a Sustainable World conference on September 6th. Click for details!
Márton Békés, Associate Partner of McKinsey & Company stressed that a slowdown in economic growth is not necessary to achieve climate neutrality. What is needed, however, is an investment of EUR 150-200 billion. Gergely Pókos, Head of the Green Program Director of OTP Bank emphasized that we are not talking about a distant future, but that technologies are already available that can deliver higher returns with less energy investment. There is a period until the current tools and technologies are replaced, but you don’t have to give up your economy, you just have to go through the usual processes.
A financial intermediation system is a good tool for incorporating certain motivating factors into a system.
– said the expert, then switching to financing, explained that the banks should regulate the existing green programs and areas. These include public or freight transport, electric agricultural or heavy vehicles, solar parks and buildings. They already have the technology and experience in the market.
Gergely Pókos was the head of OTP Bank’s Green Program Board, and continued his studies at the Budapest University of Economics and then at the London Business School. He worked as a consultant for 8 years at M
Next
György Szeged, ESG and Sustainability Manager of Magyar Bankholding according to the decarbonisation goals come with a citation that we have to undertake for the good we need. Education must also be given great emphasis, because it is also a transformation of thinking. As an example, despite the fact that more and more cars are becoming powered by electricity, sustainability also means switching to less car use, in which public transport incentive programs are also possible.
In connection with the consequences of the Russo-Ukrainian war, there was talk that long-term climate policy goals should be confronted with short-term action. Although this is a transitional period, the transformation of the energy market requires some, unsustainable application. A funding framework is also being developed at EU level, some elements of which would probably not be needed if Europe did not have to break away from Russian gas.
Frigyes Endersz, Strategic Director of the E.on Group he said that while major changes are usually driven by interests, there are corporate and government incentives that steer decisions in just the right direction.
Thinking in the long run, war will accelerate the green transition because it will simply appreciate renewable energy. Only the very short is another issue, many countries are taking a concrete distance against climate neutrality because of security of supply, because in the long run it can only work if it survives in the short term.
said the headmaster.
From 2000 to 2012, he worked for the consulting company IFUA Horváth & Partners, and held several management positions. He joined the Magyar Telekom Group in 2012: for the first time, T-Systems Hungary stra
Next
Energy strategy needs to be redesigned – But how?
Frigyes Endersz in connection with the domestic energy sector, it drew attention to the importance of developments; In Hungary, the capacity of the solar power plant has exceeded 3,000 megawatts, which is one and a half times the capacity of the Paks nuclear power plant. The network was not invented in this way, according to the expert, who added that the future lies in the development of storage capacity and the diversification of technologies.
Steiner Attila he said the government is working to encourage renewables among both the public and the industrial sector. Although network developments can take several years, something still needs to be done, and the role of gas as well as batteries can be appreciated in the short term. In the long run, the goal is to boost solar energy and support nuclear energy. In connection with wind energy, he said that where there are wind farms, there are several sources that we are basically better at, and in the case of Hungary, solar energy.
By 2030, solar power was originally planned to reach 6,000 MW, and licensing for 5,000 MW is currently underway, which shows that we are faster than expected. Based on this, by 2030, the capacity of SOLAR SYSTEMS could be as high as 12,000 megawatts.
The Secretary of State responded to an earlier announcement that a stop had been announced for the connection of solar power plants to the grid. We wrote about the announcement in detail here:
Steiner Attila said they were working to ensure that more solar power plants could be connected to the grid,
to support the development of a large support program for storage.
In addition, there is a HUF 103 billion tender program for the development of transmission and distribution networks, which is pre-financed by the government from the EU RRF.
How much does a green switchover cost?
The study predicted € 150-200 billion in green switchover investment costs, Márton Békés he said that this included green investments as well as an intermediate support in the end. It is therefore an annual capital injection of EUR 5-6 billion, which later brings with it GDP growth and other savings. Steiner Attila in this connection, he said that this is also a large amount in terms of GDP, but it can be created with domestic and EU funds, private capital and the opportunities provided by green bonds. Gergely Pókos added to the financing that in the case of OTP alone, green investments providing HUF 1,500 billion by 2025 (almost HUF 3.8 billion in terms of HUF 395) will be provided, while the annual 5-6 billion euros did not lag behind. In addition to bank lending, state and EU subsidies will be involved, so it is not so much a matter of fear of creating financing, but of overcoming technological and construction barriers and finding incentives.
Cover image: Getty Images