The International Energy Agency (IEA) welcomed Hungarian measures to boost energy security and reduce emissions, but recommended a gradual return to full liberalisation on the retail energy market in an assessment of the country’s energy policies released on Thursday.
“We applaud Hungary’s achievements in reducing the carbon intensity of its economy, building energy infrastructure and strengthening energy security, most notably via gas storage,” IEA Executive Director Fatih Birol said in a statement released by the agency.
“Hungary has made progress in diversifying its energy supplies and increasing competition in the energy sector, but there is still more to do on both fronts,” he added.
The IEA noted in the assessment that Hungary’s government had mandated utilities price cuts for households starting in 2012 and had later established a state-owned energy retailer that acquired a number of its foreign-owned peers. Although acknowledging that the price cuts had “boosted the purchasing power of households”, it warned that the consolidation in market power “is likely to have repercussions on the investment climate in the energy sector and on competition in the retail sector”.
It recommended that the government “develop a clear and transparent programme for the implementation of full retail market liberalisation, including the elimination of administratively determined end-user prices”.
The IEA also recommended improved implementation of Hungary’s National Energy Strategy to 2030, more ambitious energy efficiency targets and compliance with EU principles, rules and regulations with regard to the upgrade of the Paks nuclear power plant.
Prime Minister Viktor Orbán held talks with Fatih Birol, the executive director of the International Energy Agency (IEA), in Parliament on Thursday, Orban’s press chief said.
They discussed global energy security issues, Bertalan Havasi said, adding that the IEA chief praised Hungary’s energy security measures.
Birol also commended Hungary for its efforts taken to reduce the country’s greenhouse gas emmission, he said.
He welcomed the drafting of Hungary’s 2030 National Energy Strategy published in 2011 as a significant step in the right direction.