Support from Brussels: Hungary to expand renewable energy in district heating with €238M investment plan

Steiner noted that the European Commission had approved the Energy Affairs Ministry’s HUF 95bn (EUR 238m) funding plan to support investments in green district heating technologies and efficiency upgrades of existing networks. He said tenders for the funding are expected to be called by year-end.

He added that the government is also working to raise the 2pc profit threshold for district heating providers after 2025 to encourage investments.

In district heating in Hungary, there are several types of technology: companies or enterprises serving the system combine energy production and service, but there are also cases where several different heat production units are connected to the same infrastructure.

“The big positive of district heating is that we produce energy under controlled conditions and on a larger scale than if we were to do it individually, which results in efficiency gains,” said Attila Steiner.

To ensure long-term sustainability, the government is also working to increase the profit margin for district heating companies: currently, regulations only allow a 2% profit margin, which makes it difficult to make investments, especially when obtaining bank financing.

Attila Steiner added that to access tender funds successfully, “the profit margin for new investments will be increased after 2025, helping to make more renewable and energy efficiency investments possible“.

The policy maker also told Portfolio that geothermal energy is seen as an important breakthrough that can significantly contribute to the sustainability of Hungarian district heating systems. The aim is to double the share of geothermal energy in district heating production by 2030, which could replace hundreds of millions of cubic metres of natural gas, reducing the country’s energy dependence and costs.

“The modernization of district heating systems is of paramount importance not only for economic but also for environmental reasons”

He added that Hungary is already well-positioned in Europe in using geothermal energy, but it remains important to increase the use of this renewable energy source through new investments and technological developments.

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