Gábor Szita believes the future of geothermal in Hungary depends on whether the government policy supports geothermal projects, as did the former government 10 years ago when geothermal development flourished. Then monies were available, the plants ran at high efficiency, and all the equipment worked. The government only has to re- implement the plan.
Moving toward this goal is the Division of Business Development and Communication, in the Mining and Geological Survey of Hungary. The division is headed by Dr. Annamária Nádor, who kindly sent the following information about a new plan for geothermal risk insurance.
She writes, “Hungary is well advanced in introducing a new geothermal risk insurance scheme in 2020. This is well established at the policy level: both the new National Energy Strategy and the National Energy and Climate Plan (both issued in January 2020) explicitly mention the Geothermal Guarantee Fund. The first step is introducing the pilot projects financed by the Swiss-Hungary Cooperation Program with about 14 million CHF of starting capital.
“Experiences from these projects will be used to elaborate further the details of the risk insurance scheme for the future. According to the Hungarian proposal, geothermal projects that apply full injection will be eligible, irrespective of the depth of the research, the petrological nature of the reservoir, and the technology of the exploration and production activities. The planned schemes support project development by tenders, in a phased, ex-post-financed way, by investment risk mitigation, the partial sharing of investment risk, and the introduction of collateral for failure coverage.
“The legal acts about the introduction of this Guarantee Fund are elaborated and presently (in March 2020) under Parliamentary discussion. The concept papers and technical background materials supporting this initiative benefited a great deal from the GeoRISK project and its studies, especially on risk assessment methodologies and the overview and in-depth analyses of the already existing schemes all over Europe.” (For more information, contact Dr. Nádor at: email@example.com)
The Hungarian Ministry for Innovation and Technology, established in 2018, coordinates the entire energy sector, including geothermal. In 2018, the ministry established the Energy Innovation Council to offer expert input for a review of the Hungarian Energy Strategy. The council includes several thematic sub-groups. Geothermal energy plays an important role in the sub-group dedicated to renewables.
I interviewed Dr. Péter Kaderják, Minister of State for Energy Affairs and Climate Policy, within the Ministry for Innovation and Technology. He said energy and climate policies contribute over 70 percent of the climate problems. To manage climate issues means using local energy resources and energy efficiency. President Orbán, he said, is very much aware of the climate issues and in favor of the policies alleviating them. Dr. Kaderják’s office offers regulatory and financial help to developers.
The Hungarian Government issues the right to drill geothermal wells and chooses which areas to open for exploration. Those with the highest bids for the licenses enter the market. In 2019, Aspect-TDE Geotherm Kft won the Gádoros area tender for geothermal energy exploration, production, and prospecting.
“At a policy level, the licensing system is stable,” Dr. Kaderják said. “Concessions are for 35 years. To receive a license, a person must demonstrate financial and technical capability. We are far from our full potential in promoting geothermal development, but we are trying to get ahead.” (for more information, contact Dr. Kaderják at: firstname.lastname@example.org)