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13 Jul, 2022 14:08

Hungary declares energy emergency

Budapest will ban exports and boost domestic production ahead of possible winter shortages
Hungary declares energy emergency

The Hungarian government declared a state of emergency over tightening energy supplies on Wednesday. Gergely Gulyas, an aide to Prime Minister Viktor Orban, announced that domestic gas and coal production will be stepped up and gas reserves filled before winter.

With the EU cutting itself off from Russian energy imports, Gulyas told reporters that the bloc will likely not have enough gas from Autumn onwards. In response to the supply crunch, he announced a seven-point plan, effective from August.

Hungary will increase domestic gas production from 1.5 to 2 billion cubic meters, while filling the country’s storage facilities with foreign gas. At present, Gulyas said that the country's reserves are 44% full.

Meanwhile, his government will impose a ban on the export of firewood, while increasing domestic coal extraction. At the same time, the coal-fired Matra power plant will be restarted as soon as possible, having been partially shut down since January 2021.

The operating hours of the Paks nuclear power plant – which produces more than half of the country’s electricity – will be extended, while customers using more than an allotted amount of power will not be offered fixed rates. Price caps currently ensure that Hungarians pay six times less than market prices for power and eight times less for gas, according to government commissioner Szilard Nemeth.

Hungary relies almost entirely on Russia for its natural gas, and has opposed an EU embargo on the vital resource. Orban predicted last month that such a ban “will ruin the whole European economy.” Hungary has also opposed the EU’s phased withdrawal from Russian oil imports by the end of this year, and has been given a waiver to keep purchasing the fuel from Moscow.

With other EU countries – such as Germany – suffering economic turmoil after placing penalties on Russian fossil fuels, Orban’s government has lashed out at proposals from the bloc to share what little gas they have equally.

“Hungarian gas storage facilities will remain Hungarian property, we will use the gas in Hungarian gas storage facilities purchased with Hungarian taxpayers’ money in Hungary,” Foreign Minister Peter Szijarto said last week, adding that the gas-sharing suggestion “reminds us of communism.”

Despite a swathe of protectionist measures, Gulyas told reporters that Hungary will have to reduce its energy consumption. Similar announcements have been made in Germany, where officials have told the public to lower their heating thermostats and take shorter showers. In May, the International Energy Agency warned of impending fuel rationing across the entire continent.