Combined Heat and Power: The Most Successful Energy Projects in Hungary

ABSTRACT

Cogeneration is a very important tool for saving primary energy, avoiding network losses, and reducing emissions, in particular of greenhouse gases. In addition, efficient use of energy by cogeneration can contribute positively to the security of a nation's energy supply and to the competitive situation in both the private and public sectors of the energy market. For this reason, the Hungarian Ministry for Economy and Transport enacted legislative motivations for the implementation of combined heat and power (CHP). As a result of this legislation, power grid administrators have been obliged since January 2003 to purchase, at a subsidized price, electricity produced by cogeneration plants. The legislation of the Ministry heavily influenced energy investment, and implementation of CHP units with gas engines, which were the most successful energy projects in Hungary in the last few years.

This article:

	introduces the Ministry mandate to purchase cogenerated electricity at a subsidized price
	shows the infl uence of the mandate on investments
	reviews changes, reasons, and market reactions chronologically from instatement of the mandate
	shows the results of an economic analysis of a selected project.