ENFANTS TERRIBLES

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EU funds contribute to the objectives of national energy scenarios only to an extent; the full potential of energy efficiency and renewables is not realised. While EU funds may contribute to some transformation of the energy system, funding from other sources is likely to continue unsustainable energy production and consumption patterns. Although energy efficiency remains a national priority, horizontal mainstreaming of climate considerations is insufficient. Some progressive efforts and planned interventions, albeit without EU funding, mean that unsustainable development paths do not prevail entirely. The Hungarian energy system (Graph 60) is characterised by low per capita energy consumption and a relatively high energy intensity. While forecasts for 2010 to 2020 expect overall energy consumption to increase by around 1.6% annually and electricity consumption by 2.2% annually, in reality domestic energy consumption has decreased by 1.3% per year for the last ten years on average. Alternative energy mix scenarios prepared by both NGOs and a working group at ELTE University for 2050 confirm the renewables potentials identified in the National Energy Strategy and the Hungarian Academy of Sciences, the growing potential of which depends on economic and technical conditions. The EU’s 2020 targets are insufficient to keep emissions below the limit necessary to ensure global warming does not exceed 2 o C. Consequently, Hungary’s 2020 targets are also unacceptably weak, even allowing for an increase in greenhouse gas emissions. Specifically: • Greenhouse gas emissions: to increase by not more than 10% (base year 2005) by 2020 (versus the European target of 20%). • Renewables: 14.65% of total energy consumption (while the EU target is 20% by 2020). • EE: total energy savings 18% (while the EU target is 20%) The National Energy Strategy claims to promote the transformation of the energy system with modestly progressive objectives. As evident in the chart below (Graph 60), not even the ‘green’ scenario utilises the full potential of renewables, and the National Energy Strategy opts for the ‘joint effort’ scenario. In addition: • In terms of electricity production, the National Energy Strategy prefers the ‘nuclear – coal – green’ scenario, the first two elements of which will be financed from sources other than EU funds, but put Hungary’s energy system on an unsustainable track for a long time. • Despite the constant decrease of overall energy consumption, this scenario was recently adjusted with renewed national forecasts, which also curbed the ’green’ part of the scenario. Both changes were mainly made to justify the viability of the construction of the Paks-2 nuclear power plant. • The last aim of the National Energy Strategy, i.e., strengthening the role of the state, is contradictory to the country-specific recommendations of the Commission (gradually abolish regulated energy prices, ensure the independence of the national regulator), and the government has no intention of changing its position on this issue, despite Vice- President Šefčovič’s recommendations 169 . Consequently, EU funds are a drop in the ocean of ‘green energy reform’ and will be spent in an economic environment that is in contradiction to Commission requirements. The government’s approach to energy transition is also highlighted in the Smart Specialisation Strategy (RIS3): its priority of ‘clean and renewable energies’, instead of promoting a real energy system transition, maintains unsustainable energy production patterns (fossil fuels and nuclear) with only small upgrades (‘window-dressing’ such as clean coal technologies, innovative nuclear technologies, energy storage and distribution and the utilisation of ‘waste energy’). More forward-facing is the priority ‘ICT’ which includes ‘smart city’ in the energy domain. 169 https://ec.europa.eu/commission/2014-2019/sefcovic/announcements/hungary-and-energy-union_en 108 ‘Climate’s enfants terribles: how new Member States’ misguided use of EU funds is holding back Europe’s clean energy transition’
GRAPH 60: Climate targets, scenarios and the role of EU in Hungary’s investment policies GRAPH 61: Energy financing – needs and allocations 1 600,00 euro 12 000 1 400,00 10 000 1 200,00 8 000 1 000,00 6 000 800,00 4 000 600,00 0 400,00 200,00 0 2010 2020 2030 2040 2050 A B C D E A Housing Negajoule B Housing MEHI C Energy efficiency D Renewable energy E Packs 2 new nuclear reactors No data Electrivity import Biofuels and waste / biomass Geothermal, solar, winf Hydro Nuclear Natural gas Oil Coal “Green” scenario “Joint effort” scenario “Business as usual” scenario Total estimated costs to reach EE/RE potential / build new reactor 2GW Estimated costs to reach EU targets Estimated state support to reach EU targets / to cover financial losses of new nuclear reactors fo 7 years Allocation buget from EU funds 2010: Official Primary Energy Consumption and Energy Mix of Hungary by the International Energy Agency 2020 and 2030: Scenarios of Primary Energy Needs of Hungary from the National Energy Strategy - 2030 2040: Scenario of ELTE University ‘Erre van előre’ Working Group with 60% Less Energy Consumption Produced from 100% renewable 2050: Scenario of Progressive Energy Revolution (2011) by Greenpeace Hungary with 38% less energy consumption produced over 75% from renewables and without nuclear energy KICKING OFF THE FINANCING A - Housing NegaJoule: NegaJoule 2020 is a study by the Hungarian NGO Energy Club. It proposes that the potential energy savings in Hungarian residential buildings is 117 PJ annually. Total support (30%) for seven years would cost about EUR 2 billion. B - Housing MEHI: This study by the Hungarian Energy Efficiency Institute (MEHI) and its partners (Hazai Hatékonyság Program, www.hazaihatekonysag.hu) proposes financing for energy efficiency during the 2014-2020 period at approximately EUR 600 million annually, or EUR 4.2 billion for the period 2014-2020. C - Energy Efficiency: The estimated need for state support is approximately EUR 2.72 billion in order to reach the EU target (44.6 PJ/year savings during the 2014-2020 period, own calculation based on the National Energy Efficiency Action Plan II). Direct support of energy efficiency is approx. EUR 1.16 billion, according to allocations in the Operational Programmes. D - Renewable energy: Estimated costs to reach the EU target (14.65% renewables by 2020) are EUR 1.4 billion (own calculation based on data from a background study to the National Renewables Action Plan by the Hungarian Energy Office and Pylon Kft.). Direct support from renewables in ESIF is approximately EUR 876 million according to allocations in the Operational Programmes. E - Paks 2 new nuclear reactors: The estimated costs of the new 2 gigawatt nuclear reactors at Paks is over EUR 12 billion, and a study by Energy Club states that in the case of the most likely future energy price (25% higher by 2026), the state would cover the financial losses of the state-owned power plants by approx. EUR 3 billion over the first seven years of operation. Since there was no ex-ante assessment of the Partnership ‘Climate’s enfants terribles: how new Member States’ misguided use of EU funds is holding back Europe’s clean energy transition’ 109
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CLIMATE’S ENFANTS TERRIBLES HOW N
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TABLE OF CONTENTS EXECUTIVE SUMMARY
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safeguard mechanism, the Strategic
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SLOVAKIA HUNGARY ROMANIA CROATIA Sl
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INTRODUCTION PURPOSE OF THIS STUDY
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EU FUNDS IN CENTRAL AND EASTERN EUR
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LT RO SK HU CZ LV CEE EE PL HR 20.0
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GRAPH 7: Comparison of energy effic
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GRAPH 10: Different types of energy
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GRAPH 12: Member States’ GHG emis
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TABLE 2: Criteria for renewable ene
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What EU money can’t buy: the gree
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25% of production respectively 30 .
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are implemented through six Nationa
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track to carbon-neutral development
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It is also worth noting, that all O
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very specific - although mostly sil
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110 billion in the optimal renovati
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whose ROP clearly prioritises commu
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aimed at modernising and building n
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The long and rocky path away from s
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GRAPH 21: Production of electricity
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CLIMATE ACTION: THE CASE FOR EU FUN
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GRAPH 23: Investment areas of Cohes
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could play a major role in replacin
Page 51 and 52:
The missing pathway to long-term de
Page 53 and 54:
intensity has decreased over the la
Page 55 and 56:
achieving policy objectives. Such i
Page 57 and 58: change. Nevertheless, no specific c
Page 59 and 60: Considering the fact that renewable
Page 61 and 62: equires a more comprehensive assess
Page 63 and 64: A ‘green’ veneer, but at what c
Page 65 and 66: NATIONAL GHG EMISSIONS The transiti
Page 67 and 68: monopoly (which imports Russia`s ga
Page 69 and 70: GRAPH 36: Cargo traffic by mode of
Page 71 and 72: than that of deforestation, some ex
Page 73 and 74: GRAPH 41: Energy efficiency allocat
Page 75 and 76: Bring on the money, don’t ask for
Page 77 and 78: GRAPH 43: Energy mix of the Czech R
Page 79 and 80: Regarding the Europe 2020 emissions
Page 81 and 82: the renewables share to 35%, the Cz
Page 83 and 84: of commitment of public authorities
Page 85 and 86: GRAPH 53: Share of transport modes
Page 87 and 88: TABLE 12: Renewable energy output i
Page 89 and 90: 2007-2013 2014-2020 In the Enterpri
Page 91 and 92: GRAPH 55: The different types of en
Page 93 and 94: Finance for the energy transition -
Page 95 and 96: ENERGY SECTOR OF SLOVAKIA: STEADY W
Page 97 and 98: strategy until 2030, in 2012, but t
Page 99 and 100: This support is very welcome as it
Page 101 and 102: environmentally-friendly production
Page 103 and 104: participation in assessment procedu
Page 105 and 106: The Integrated Infrastructure OP se
Page 107: THE DARK SIDE IS IN THE DETAILS Cli
Page 111 and 112: GRAPH 64: Total climate allocations
Page 113 and 114: EXPECTED COMPLEMENTARY FINANCING MO
Page 115 and 116: Recommendations for the mid-term re
Page 117 and 118: Notwithstanding a few exceptions, t
Page 119 and 120: c) Renewable energy sources Eligibl
Page 121 and 122: enewables in transport, as this tas
Page 123 and 124: Annex II - Complementary financing
Page 125 and 126: Going ‘super-green’, but not ri
Page 127 and 128: GRAPH 67: Energy mix 2013 - Gross i
Page 129 and 130: OVERVIEW OF EUROPEAN STRUCTURAL AND
Page 131 and 132: cogeneration systems, monitoring sy
Page 133 and 134: pollution levels and poor air quali
Page 135 and 136: line with the Europe 2020 targets a
Page 137 and 138: esidential sector and the usage of
Page 139 and 140: In the preparation phase, the mains
Page 141 and 142: of the Thematic Objective or progra
Page 143 and 144: Land of unfulfilled clean energy po
Page 145 and 146: hydropower plants (94%), and the ot
Page 147 and 148: points to a need for the developmen
Page 149 and 150: and adaptation, disaster resilience
Page 151 and 152: significant biomass growing fields.
Page 153 and 154: ports (EUR 140 million), new and im
Page 155 and 156: RECOMMENDATIONS FOR PLANNING, MONIT
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ENFANTS TERRIBLES

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