Hydrogen Economy in Hungary: Current Status and Future Outlook
The hydrogen economy in Hungary shows promising growth potential, with a significant increase in renewable energy capacity, particularly in solar and wind power. The integration of hydrogen into the electricity system through mass electrolysis rollout offers flexibility and balancing services. Green hydrogen production is in its early stages, but with strategic policies and funding support, its scalability is envisioned, akin to the evolution of photovoltaics in the early 2000s. Initiatives like IPCEI Hy2infra aim to scale up and create an EU-wide hydrogen network, addressing energy storage needs and renewable energy generation capacities by 2030.
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Hydrogen Economy in Hungary Status and future prospects March 2024
9 years ago the biggest news in the Hungarian RES market is a 15 MWp solar power plant... Would you believe in 2015 that in less than 10 years we will have an overheated solar market? From 80 MW to 5649 MW..
The electricity system can benefit from mass electrolysis rollout by adding flexibility to the system. Hydrogen is not just an energy carrier, but a balancing carrier at various time-frames. From when? How? Stakeholder? Counterparty? Ancillary services 2026- aFRR-/+ PEM operators TSO Service to the balancing circle manager RES Co-located PEM operator Balancing services 2030- Balance manager DSM service providing with PEM Industrial player with PEM DSM 2035- Energy trader Up/downregulation at DSO Flexibility services 2030- PEM operators DSO PEM operator w green ammonia/methanol production Hydrogen long-term storage Seasonal energy balancing 2045- Energy trader
Green hydrogen is in its infancy with policy support to scale-up. The status of green hydrogen production is similar to that of photovoltaics in the early 2000s. 2020: Strategy on Hydrogen IPCEI Hy2Tech Early-stage IPCEI Hy2Use Strategy 2020: Strategy for Energy System Integration EUR 5.4 billion 41 projects EUR 5.2 billion 35 projects Strategies and policies IPCEI First Wave 2023: RFNBO 2021: Fit-fot-55 IPCEI Hy2Infra IPCEI Second Wave [Insert main area] 2021: Recovery and Resiliency Facility EUR 7 billion 33 projects Funding 2022: Horizon Europe Scale-up Funding Clean Hydrogen Partnership European Hydrogen Bank Market- making R&D Green Hydrogen research and development in Horizon Europe Standardization Bankability EUR 1 billion 4
IPCEI Hy2infra: Scaling-up and creating EU-wide hydrogen network But really, how to grab hydrogen? 5 workstreams covers the whole value chain Large-scale EU-wide projects
Faster than expected intermittent renewable generation highlights energy storage needs. Energy storage and flexibility need is increasing rapidly hydrogen as a storage media will become viable around 2030- 2035. Renewable electricity generation capacities by technology (built-in capacity, MW) NECP ( National Energy and Climate Plan) projects 6 GW solar panel capacity by 2030. Wind power plants expected to undergo a similar increase, with installed capacity rising from around 330 MW to 1,000 MW. We predict PV capacities to rise from approximately 5 GW to nearly 12 GW by 2030. Source: National Energy and Climate Plan
The Hungarian hydrogen economy is in its early stage: adopted hydrogen strategy and grant schemes to foster market development. How to scale-up hydrogen without competitive advantage? High intensity grants or regulatory compliance 3 4 2 1 Challenges: Challenges: Valley development Piloting Adopted strategy Initial phase Hydrogen Strategy National Hydrogen Technology Platform Green hydrogen s TCO B kk br ny project 1 MW Sectoral strategies Complex project structures Aquamarine project 2 MW Hydrogen White Paper Action plans Late equipment delivery MOL Szazhalombatta 10 MW Recovery and Resiliency Plan 5 30 MW off-grid green hydrogen production Funding 60 Fuel cell vehicles Recovery and Resiliency Plan Green Funding Scheme Hydrogen Valley Calls 40 Fuel cell buses
The Hydrogen Strategy boosts all the pillars of the hydrogen economy. The strategy s four pillars support each other. Vision 2030 Low carbon generation Industry decarbonization Green transport 20 20.000 t/ year low- carbon 16.000 t/ year green 240 MW electro- lyser 20.000 t/ year low- carbon 4.000 t/year green 95.000 t CO2 reduction hydrogen refueling stations Heavy- duty+bus 4800 HFC Sector coupling: electricity 60 MW cutoff capacity Sector coupling: gas supply min. 2% blending volume increase
In line with EU policies, the hydrogen economy development focuses on two hydrogen valleys. Geographically concentrated, complex value chain development Ammonia Refinery Steel Chemical Petrochemical
Some early bird projects focus on piloting and replacing grey hydrogen with green (PEM) hydrogen production. Existing hydrogen applications are based on grants or RFNBO requirements. 2 MW 10 MW 1 MW SIZE PEM PEM PEM TECHNOLOGY Refinery RES integration Blending USE CASE 22 million EUR 3.4 million EUR BUDGET 7.5 million EUR 2023 2024 2023 CoD
Larger and more complex pilots and 100+ MW black hydrogen greening projects will follow. Grant schemes and stable regulatory framework is of utmost importance. Area Expected results Certainty 50+ legislation change to enable hydrogen project scale-up 1 30 MW electrolyser + renewable generator (grant intensity: 60-70%) RRF project implementation 60 fuel cell vehicles (grant intensity: 60-70%) 40 fuel cell buses (grant intensity: 100%) 2 Refinery decarbonization MOL s second project? Industry decarbonization Chemical industry? Green steel? 3 Horizon Europe Hungarian participation Non-industrial green hydrogen projected Cross-border hydrogen projects Hydrogen as an energy storage medium projects
Key takeaways for the Serbia Focus on existing hydrogen consumers first, build valleys around them with small and not ambitious diversification. Enablers and regulatory obstacles Focus on Hydrogen valleys and market- making Diversified piloting competitive advantage Carefully selected pilots that can serve as role models for further applications and projects. Think about system and do not focus on individual technology. Pilots should cover a wide range of use cases. Existing dirty hydrogen decarbonization is easier than building up new consumers with new value chains. Regulatory obstacles shall be eased-out. Non-financial support systems are also important. Serbia s competitive advantage is the capacity factor of wind + solar+hydroco-located projects. Hydrogen projects have very high intrinsic risk not easy to get financing. Hydrogen large-scale transport is not feasible. The state should help projects with the financing struggle (The European Hydrogen Bank is a good example similar structures are needed). The hydrogen value chain is complex and contains many elements. The country s R&D direction should be very focused and specialized. Focus on nice R&Ds.
