4 October 2010: Energy efficiency and Hungary

Last week, I attended a European Commission conference on the future of energy policy. Energy Commissioner Oettinger delivered a worthy though unsurprising speech, but did at least stress energy efficiency – “vast untapped potential” – and said that this was his first priority.

Philip Lowe, Director General of Energy in the Commission, then presented responses to Commission’s consultation on future energy policy. Again nothing unexpected, but Lowe is very good. In his closing remarks at end of the day, he said that energy has been talked about too much as an environmental issue and not enough as a consumer issue.

The best speaker was Diana Urge-Vorsatz, from the Central European University in Budapest. She pointed out that:

  • 80% of Hungarians have to spend more than 10% of their disposable income on fuel bills (this is the UK definition of fuel poverty).
  • The Hungarian government has agreed to radical renovation of existing buildings to reduce this, reduce need for gas and electricity imports (Hungary imports most of its gas and about 10% of its electricity – see Hungary – climate and energy statistics) and create jobs.
  • Hungary could now spend 4% of structural and cohesion funds on energy efficiency and that the Commission wants it to do so, but the authorities in Hungary were less interested. (She didn’t explain why. This contradicts what she’d previously said about the Hungarian government, but there weren’t any opportunities for questions.)

The Commission’s new Energy Efficiency Action Plan is now due out in December 2010. Then, there’ll be an Infrastructure Package and an Energy Action Plan (covering energy supply). The Commission’s aim is to have all these out before 4 February 2011, when van Rompuy has called a summit on energy that heads of government say they’ll attend.

I subsequently read an interview that Urge-Vorsatz gave last month to Green Horizon magazine. In this she says:

As things stand now, obsolete housing and bad district heating systems already force people to pay much more than they should. In fact, about 80 percent of Hungary’s population lives in energy poverty if we define it the same way as it’s defined in the UK, which is if you pay more than 10 percent of disposable income on energy bills. This is really quite shocking. We have estimated that inability to afford basic energy leads to between 2,000 and 2,500 deaths each year in Hungary alone.

She then says that improving the building stock would enable Hungary to reduce its annual gas imports by 40% (see Green Horizon: Achieving transformational change: Diana Urge-Vorsatz).

Hungary takes on the rotating EU Presidency in the first half of 2011 and energy efficiency is an area where the Hungarian presidency may be a good opportunity. (Hungary has little apparent interest in renewables or CCS.) Poland, which comes after Hungary, has also done better than most member states on renovating existing building stock. Urge-Vorsatz covers this too:

In terms of residential energy consumption in the region, nearly every country in the region has improved by about 1 percent per year on average. But Poland has improved by something like 20 percent over five years. It’s very dramatic improvement … My Polish colleagues say that it’s because the country has put a lot of money into thermo-modernisation, so they are retrofitting a lot.”

(See Green Horizon: Achieving transformational change: Diana Urge-Vorsatz.)

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