Abstract
There are many compelling arguments for using geothermal energy in Hungary. One of the most important is that the country could thereby exploit its abundant, relatively untapped network of geothermal reservoirs. These are considerably warmer and closer to the surface than in most of Europe. In the foreseeable future, Hungary’s geothermal resources can satisfy the conditions required for efficient energy production. The tremendous amount of energy stored in our geothermal reservoirs could satisfy much of the country’s long-term energy demand. Every geothermal project is designed to fulfill its project objectives by meeting time, budget, technical, and legal/regulatory provisions. Geothermal development is necessarily exposed to risks of varying degrees throughout its development, something which distinguishes geothermal from other kinds of renewable-energy projects. These risks most often concern the availability, amount, suitability, sustainability and use-potential of the geothermal resource, but may also include market, financing, commercial and macro-economic risks. This article describes the geological background and geothermal potential in Hungary. Hungary’s current geothermal production remains at a low level, given its proven capacity. Although Hungary lacks an overarching national plan for specifically exploiting its geothermal resources, the 2018 National Smart Specialization Strategy (S3) highlights the promotion of clean and renewable energies. Geothermal clearly fits into this scheme, as S3 is designed to include renewables, nuclear energy and increased energy efficiency in conventional energy production. Furthermore, in 2020 the Hungarian Energy and Public Utility Regulatory Authority (HEA) compiled a plan to promote the greater use of geothermal energy. Based on the Hungarian government’s geothermal investment support scheme, the authors have presented a risk-based assessment of Hungary’s geothermal development possibilities, differentiated in terms of low, medium and high risk levels.
Highlights
All geothermal projects aim to generate inexpensive power for consumers and yield a profit for investors, while holding down operational and maintenance costs
National governments use many policy and regulatory instruments to smooth the path for renewable energy production, the high-risk and significant up-front capital required for geothermal power development makes it a special case in the renewable-energy palette: until the first borehole is drilled into a geothermal reservoir, developers cannot know the exact parameters of the planned geothermal project [11]
The source of the premium would be money paid into the district heating fund. This support distinguishes between two cases: a. where geothermal district heat production does not yet exist, potentially feasible, the level of support is conditional on the share provided by geothermal energy rising to between 25% - 100%, for a minimum of 20 Ft/GJ and a maximum of 300 Ft/GJ; b. where geothermal district heating already exists but can be increased, the level of support is conditional on the share of geothermal energy rising to between 55% 100%, for a minimum of 20 Ft/GJ and a maximum of 300 Ft/GJ
Summary
All geothermal projects aim to generate inexpensive power for consumers and yield a profit for investors, while holding down operational and maintenance costs. To meet these goals, there has to be a demand for power, the resource should be suitable, and the resource’s exploitation must be sustainable. The necessary investors, lenders, customers, and technical experts must agree to get involved. This would minimize project risk for investors [12]. Time-risk reduction for geothermal projects works best as a component of coordinated plans which recognize the project’s particular needs and conditions [14]
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