Falcon in the Storm
By Ainslie Beattie 17th May 2018 Energy
The nation of Hungary, throughout its 1000 year history, has always been at a crossroad. Due to its location, it is one of the places where Western and Eastern Europe meet- sometimes in the shape of cultural exchange, trade, or, more often than not, in war.
Wedged between Russia, Germany and the Balkans, it always played a deadly gamble, making deals with the superpowers of the lands beyond its moderately sized mountains.
This historical momentum is clearly discernible – if you look at the image of the country in the international media. Hungary is a member of NATO, the biggest military alliance of the Western world. It is an EU member state, but it is often accused of being influenced by Russian interference, serving as a platform for geopolitical interests that might contradict those of the Union. Given the current global political state and the ever-increasing Russian dominance in the region, Hungary feels precariously aligned and about to embark on the greatest infrastructure and economic development in Hungary ever, the Paks II project: a brand new nuclear power plant, which is bound to extend the capacity of the country’s currently operational solo plant, and later replace it, when the older facility will need to be decomissioned.
It has been highlighted by investigative journalists and climate experts that most of the current regional conflicts, be it Syria, Palestine, or Northern Africa, are rooted in water, energy and food crises, under the guise of political or religious differences.
We’ve got no reason to believe that the global political struggle between Russia, the EU, the US and China would have no effect on the outer regions of the core EU countries, where the Visegrad Four, and specifically Hungary, is located.
Paks II is a financial undertaking unlike any other in the history of the third Hungarian republic – in other words, of the last 28 years. Currently, Paks I generates almost half of all the electricity consumed within the country – Paks II means that Hungary commits itself to nuclear power for many more decades, while the rest of the world is experiencing the renewable revolution.
The current plant was built under Soviet rule, utilizing Russian technology and expertise – the new plant will use Russian reactors and is largely financed by a huge loan from Russia. The decision to go forward with Paks II was made exclusively by the Hungarian government, without involvement from any independent expert group, and without significant social dialogue or debate. Approval from the EU for the project was again pushed through for political reasons. The necessary regulations were easily pushed through the Parliament, since Fidesz, the ruling party has a majority.
It’s hard not to see Paks II as a move in a power game that reaches way beyond the Carpathian Mountains. An investment of this magnitude is a social and philosophical one, beyond politics or engineering. This is Hungary moving away from localized smart grids and energy democracy, towards a highly centralized and controlled one.
The warmth and the lighting of the homes within Hungarian communities will be subject to Russian power for the better part of a century, from now on – in an age and at a geographical location where self-sustaining local energy grids could be highly feasible.
The details of the Paks II deal are classified for decades, so we won’t know exactly how and why the Hungarian government decided to sway the country’s energy policy in this direction.
If we take a look at the current National Energy Strategy, we can gain insights into how the local political elite view this subject. The strategy was penned in 2011, and it is based on nuclear and natural gas-powered electricity generation, with coal plants not being phased out until 2050. The prospected share of renewable sources will be only 16%.
Energiaklub, one of the most experienced Hungarian energy NGO’s characterized the document as ‘superficial’ – it is not discussing the most dire challenges deeply enough, or it gives answers that are lacking in depth and detail. ‘It has no real vision’ about the future, and the material contains several ‘contradictions’. The Strategy hasn’t been up to date with the innovations even in its time, in the institute’s opinion, but this has become even more true in the years past since its release, considering the price drops of solar panels and other innovations of the renewable industry.
Fidesz-government or not, it seems the Hungarian political elite is not thinking much about the energy sector in general, not in any strategical or policy-making sense. Moreover, in a very peculiar fashion, energy issues are the only ones that always seem to be agreed upon by government and opposition. The lawmaking process is smooth, most members of the Parliament is in perfect agreement, as far as we consider the Fidesz membership, and it’s old, supposed counterpart, MSZP, the party that mostly inherited the network and personnel of the State party of the People’s Republic when the regime changed in 1990, and the party that has been governing the country in the new era for the longest time, second only to Fidesz.
This is absolutely unique. Education, healthcare, economy, population policies: there has never been a single issue in which these bitterly warring parties ever agreed upon, in many cases successfully blocking the lawmaking process when the other one was on the government. Energy distribution, however, is somehow a matter about which the mainstream political spectrum looks to be in celestial harmony.
This phenomenon is largely thanks to what has been described by energy policy experts as the infamous ‘Fónagy-Podolák Axis’: two well-established gentlemen in the membership of these two parties, who are always very quick to present detailed policy proposals when a new EU regulation kicks in. These proposals basically always favour the current energy system setup and are trying their best to protect the interests of the current big distributors, like MVM Group, the mega-corporation responsible for electricity trading, MOL, the national oil and gas company, and MAVIR, the power distribution system management organization. The argument always goes along the same lines: any differing from how the energy is distributed in the country currently would be volatile and would drive energy prices up for the consumers: which would be a huge political blow for the government of course. The proposals, then, sail through the legislative process with ease.
These organizations are maintaining a system inherited from the socialist regime, with a systems-thinking that had been relevant decades ago. The goal always seems to be absolute control, for the sake of ‘energy security’. The effects of the regulations – about how power is actually distributed – on local communities, are never really debated or even considered, at least not in the Parliament.
Now, when there are vast interests in preserving a system that is based on 50-year-old values, philosophies and technological capabilities, one can only imagine what a new power provider would need to endure to successfully connect to this system. In this environment, what hope is there for Hungarian renewable power producers? New players encounter difficulties and obstacles through every step of the way.
Solar panels have been taxed by a hefty 5%, due to ‘recycling costs’, and now another small tariff is expected to ‘fairly share the burden of system usage’. These arguments could make sense, but usually European governments are trying to find ways to help these technologies spread, because of their added value of low, or zero carbon emission, clean operation, while creating jobs and enhancing the resilience of local power systems, whereas in Hungary, lawmakers are quick to make sure that renewables are not getting any ‘unfair’ advantage.
Wind power is basically forbidden currently in the country, due to regulations banishing wind farms to at least 12 kms away from any settlement in the country: which brings down the number of possible locations to exactly zero. The newest wind farm is at least five years old, and new, industrial-scale wind turbines cannot be built right now. Even when they were legal, the capacity has always been restricted to 2 MW.
Hungary is basically a single, huge valley, with rivers, lakes, large patches of woodland and still not overdeveloped rural areas, considerable natural resources, good quality soil, plenty of sunshine, tame winds, sitting over a geothermic treasure trove second only to Iceland. The country is geographically protected from extreme weather effects. In short, a vast array of renewables could successfully be deployed here, and the settlement system (a loose network of midsized towns and villages, with the one truly global city of Budapest) could benefit largely from a smart grid of interconnected local providers, which could help in the strengthening of self-sustain in local communities – something that could mean great value for a country that is still a very young independent democracy, freed from centuries of foreign oppression only three decades ago.
But as its society struggles with its socialist era reflexes, so is its power system stuck in the past, controlled by a small circle of businessmen heavily tied in with the political elite.
In this context, Paks II becomes the logical next step for the country, because it strengthens the centralization of power, in every conceivable meaning of the word.
Energiaklub published a commentary for the National Energy Strategy, and offered four alternatives, with three of them phasing out nuclear power entirely. The most ambitious one presents a domestic electricity generation system where the share of renewable sources is 80%, and 50% of all energy consumption would be covered by them, while CO2 emissions would fall by a staggering 70% from 2010 levels.
The official Strategy aims for a meager 24% share of renewables in electricity, and 15% of all primer energy, by 2050, also means that in the three decades between 2020 and 2050 the Hungarian government is not planning any significant investment in clean technologies – which is kind of mindblowing, if we consider the global trends.
But the intriguing visions do not stop here. The Energy Strategy expects higher energy consumption levels, in direct contradiction with the European predictions. This is currently only feasible if Hungary will not upgrade its energy efficiency significantly, with projects like residential insulation and machinery modernization, and if new power demands arise through further industrialization. With Hungary being already one of the most energy-intensive economies in the EU, these predictions are retrograde to say the least.
Energiaklub, on the other hand, aims for a 42% decrease in primer energy consumption. The difference between the views of independent energy experts and government sources are so vast that even considering a reasonable debate requires great deals of imaginative capabilities.
To top it off, the ‘green’ concept is even cheaper than the official Strategy, which is based on a new nuclear power plant.
In the next articles, we will take a look at why and how the government is committed to Paks II. We will review the roadmap of the development and investigate if there is any chance left for alternatives, or if there is any room left for political action. We will provide some promising local examples to renewable energy projects managed by Transition groups and other stakeholders.
We will look for answers to the question: how can the more conscious and active Hungarian local communities prepare for a future in which the currently hostile and rigid legislative environment for clean and local energy solutions will not ease up the slightest bit?
Images 2 and 3 sourced from Politico RESEARCH