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The wind power production prospects in Hungary Print E-mail

Energy has become a top priority for EU policy makers. Until now, the reliable energy supply has been taken for granted in modern society, but the security of this supply is currently under threat. The member states of the European Union make –in general- big hopes to the wind power and in the frame of it to reach the mandatory target that 20 % of the energy be used by 2020 by the utilization of renewable energies. Their commitment to fulfill this target is reflected by the fact as well, that in 2008 more wind power was installed, than any other electricity generating technology. Acc. to the European Wind Energy Association (EWEA) statistics 43 % of all new power capacities (8,484 MW) was wind power , ie every working day in average 20 wind turbines was put into operation in the Union and the investment was worth to around 11 thousand Millions Euros.

What is the situation in Hungary, what are the wind power production prospects? 

In Hungary 71 wind turbines with a total capacity of 127* MW was installed untill end 2008. The installation was realized based on the quota licences issued in April 2006. As it is known, in April 2006 the Hungarian Energy Agency following a peculiar philosophy issued licences worth to 330 MW all together. The specifics of the licensing had been hidden in the fact, that the applications submitted untill November 2005 were judged by a formula elaborated in January 2006, ie. subsequently. This practice was criticized by the time of its disclosure already, its non practicability has been proven since the time passed. The Energy Agency has not even tried to withdraw the quota allocated to companies who did not built their turbines, while the laws grant option for it.   

 

Chart 1.: Built in wind power capacity by end 2008 (EWEA)

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*The total capacity by 1Q 2009. with capacities under construction reaches 200 MW.

The Electric Electricity Law (EEL) passed in 2007, regulates anew the construction of wind turbines.  Para 7 of the EEL declares, that „….. wind turbines and wind farms resp. can be licenced upon a tendering procedure issued by the (Energy) Agency – in cooperation with the System operator (MAVIR) in accordance with the conditions called for in a separate rule.” Para 170 relegated it to the competancy of the minister (supervising the industry), that „the conditions of the tendering procedure for the installation of wind turbines, the minimal content obligations of the tender, as well as the rules of the tendering procedure and the important conditions of the grid connection be disclosed in a rule.” This rule has not been published untill now, while its date had been decided by the legislators for December 31, 2007. As a follow-up of this ex-lex situation, Hungary lost EUR 400 Millions capital investment.

Hungary `s negativ judgement in the field of wind turbines installation is widely known in international investment circles. The practice followed by the Hungarian Energy Agency untill now interfered the realization of a number of promising project on the negotiations seeking funding for the investment as investors envisage the funding, and/or purchasing of projects only in case they reached the so called ready for construction stage and the projects under negotiations do not fulfil this requirement. Even if the Minister `s rule will be published, no significant change can be expected. The Global venture capital does not wait, but turns to other markets, where the technical-econonic conditions are better, the practice of the licencing procedure is well arranged and consistent.

There are 7-10 projects, with 300-400 MW capacities where project developers wait for the publication of the Minister `s rule. They wait in spite of that the conditions forseen in the rules considerably limit the SME `s possibilities. The actual financial crisis as well has an unfavoruable influence on the wind turbines `installation in Hungary, as the project financment sources are decreasing and the remaining ones turn to less hazardous markets. The suspension of the manual control of the licencing procedure applied even nowadays, the unambiguous drafting of the tender conditions taking into considerations the SME `s standpoints and the shortening of the period for the evaluation of the tenders are required to win back the confidance of the Global venture capital.

The idea limiting in 330 MW the wind power capacity to be connected to the grid as the Hungarian Energy System can not receive more can not be accepted, the conclusion of the relevant feasibility study was different. It is possible to balance the intermittent wind power production because of the intermittent nature of the wind with the construction of Energy Storage Systems. There are tasks in the field of meteorological forecasts as well.

Most of the wind power capacities in the Union will be built in Germany and Spain. Significant new capacities will be realized in France and the United Kingdom as well. The wind turbines construction in these countries will be supported by the social acceptance of the surplus costs, with the subsidies of the green power. In the interest, that even because of the less favorable technical conditions – the wind in seasides countries blows at a higher speed and is more balanced – wind turbines be built in Hungary as well, the Global venture capital watch on the Hungarian projects, new attitude is required. A similar one, that succeeded in the petrochoneemical industries in their great age, in the 70.-th, as a result of which a number of up to date technologies were realized in the cooperation of motivated skilled technical and economic specialists. 

EWEA believes that the utilistaion of the renewable energies – and within the wind power in a significant way – is the only possible way to answer the energy safety challenges.  May we hope that Hungary too will participate in the capacity extension forecasted by them namely to a more significant extent than till now.

 

Chart 2.: Forecasted global capacity installation 2008-2012 (EWEA)

 

 

The utilisation of the wind power offers advantages in the employment – saving workplaces, establishment of new ones as well alongside the investments and general animation of the economy. The European wind energy sector has created 33 new jobs every day for the past five years. Currently 154000 people in the EU are employed by the wind industry, and the number of jobs will be doubled by 2020, 70 % directly and 30 % indirectly. One can not expect similar rates in Hungary as the manufacturing of wind turbines – and the R +D with it – does not take place here, but the investments may generate new workplaces in a significant number first of all because of the increasing number of employees engaged in the project development.  

Erik Groniewsky & Tünde Sarkadi
GESTCOM Bt.
July 2009