More Support For the Use of Geothermal Energy

Hungary has particularly favorable conditions for the use of geothermal energy and is already among the European leaders in this field, the Ministry of Energy (EM) said in a statement on Tuesday.

In the Jedlik Ányos Energy Program, the government is mobilizing resources that exceed previous expenditures several times over in order to make further progress. Public consultation on the first tender has begun, and the draft can be commented on on the tender website until August 15. Together with two other calls for proposals that will be open for comment in the future, a total of HUF 41 billion in funding could make geothermal energy a driving force of the domestic green economy, they pointed out.

The announcement recalls that the Ministry of Energy created the National Geothermal Energy Utilization Concept last year to promote the spread of green energy that is not dependent on weather conditions. The fundamental goal set out in the document is to double the use of domestic geothermal energy by 2030, increasing the base value of 6.4 petajoules twofold. "We can build on a strong foundation: we have already quadrupled geothermal heat energy production compared to 2010."

The recent boom in the industry has been supported by a new, flexible licensing system, the creation of the Hungarian Geothermal Cluster, and the continuation of the national geothermal research program. In previous tenders, we made more than HUF 11 billion available for the modernization of existing thermal wells, among other things. According to the National Geothermal Energy Utilization Concept, the share of geothermal energy in total heat production could rise from 6.5% to 25-30% by the beginning of the next decade. The new uses could replace a total of 1-1.2 billion cubic meters of natural gas by 2035, significantly reducing import exposure.

Based on the recently published draft call for proposals, the government may provide HUF 10 billion in non-repayable support for the costs of the first wells, thereby reducing the financial risks for investors. From this budget, 10-20 projects in rural locations may receive support of at least HUF 40 million but no more than HUF 1 billion. If the drilling proves successful, the state contribution may cover one-tenth of the total eligible costs, while in the event of failure, it may cover up to half. The deadline for physical completion is two years from the date of entry into force of the grant agreement, but no later than the end of 2028, according to the EM.

Another call for proposals will provide HUF 12 billion in support for the development of a geothermal-based heat and electricity generation system connected to the grid, based on existing production and reinjection wells. The entire budget may be allocated to a single development project.

With the exception of Budapest, any area of the country is eligible as an investment location.