Is Hungary just a step away from cheap energy?
According to an expert, Hungary may be able to secure extremely cheap electric energy if the government acts promptly. However, a shift in public mindset towards electricity consumption is equally important. The expert is optimistic about the government introducing modifications to its overheads cuts programme within the next two years.
Educating the public
Economx wrote about the Deputy State Secretary for Energy in the second Orbán-led government Attila Holoda’s forecast regarding the future of Hungarian energy. Over EUR 1 billion in EU funding was released in the past couple of days, allocated to benefit Hungarian citizens. The objective is to roll out awareness programs illustrating that energy prices can fluctuate throughout the day. The best example to demonstrate that is to imagine that there is more electricity generated during the sunny season, leading to a drop in energy prices due to oversupply. By understanding these daily price changes, Hungarians can enhance their energy efficiency. Attila Holoda sees significant potential in utilising smart meters and switches as tools for educating the public about these price variations.
Smart meters
Attila Holoda believes that the European Commission’s recent decision could significantly boost the implementation of new energy strategies. Smart metering and dynamic pricing were initially incorporated into the 2011 energy strategy but have yet to be put into practice. Holoda compares the future of energy providers to mobile networks. The expert said:
We imagine the new system as a market for mobile network providers. Initially, there were uniform per minute and SMS tariffs, but later users were able to choose between individual offers depending on whether they needed more discounted calls, SMS or internet. Consumers have become more aware and operators have tried to cater for their needs with specifically tailored offers.
Changes are coming
By the end of 2025, the government is expected to make adjustments to its overheads cuts programme, which currently consumes a substantial portion of the budget. The main change involves allowing residential consumers and micro-enterprises to voluntarily enter into an electricity purchase contract with dynamic pricing. This additional option, alongside the existing universal service, could enable households to maintain lower energy prices. For instance, hey could benefit from lower electricity prices during periods of solar panel oversupply.
To implement this, plans include equipping Hungarian households with 816 thousand smart metering devices. With over 4 million households in Hungary, this initiative means a substantial number of smart meters. However, details about eligibility and application processes are yet to be disclosed.
The clock is ticking
The Council of Finance Ministers has a four-week window to approve the European Commission’s assessment. The approval would mean a pre-financing of EUR 0.9 billion from REPowerEU. Thus, it is up to the government how swiftly they can devise and approve the assessment plan.
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