Solar Power Alone Cannot Ensure Energy Security, Says Research Institute

The growing share of renewable energy alone will not resolve Hungary’s persistent electricity price and security challenges. Addressing them will also require energy storage capacity, a more diversified energy mix to spread risks, and the preservation of nuclear power generation, reads a new analysis published Thursday by economic research institute GKI.

Summarizing its assessment of the challenges and outlook for Hungary’s electricity system, GKI noted that more than one-third (37 percent) of the country’s electricity consumption last year was covered by imports, largely during periods when prices were at their highest.

This is not a temporary situation: Hungary’s generation mix and grid infrastructure put the country at a lasting competitive disadvantage.

Nuclear power accounted for 40 percent of Hungary’s electricity generation in 2025, while natural gas contributed 20 percent and solar energy, the fastest-growing source, supplied a quarter of total output. The country’s electricity mix is increasingly shifting toward renewables, while the share of coal and other non-gas fossil fuels is declining, GKI said.

Hungary’s annual solar power generation has more than quadrupled over the past five years compared with its 2020 level. Wind power, by contrast, accounts for just 1.5 percent of generation, as installed capacity has remained largely unchanged since 2016. The government’s 2026–2030 program envisages allocating permits for at least 4,000 megawatts (MW) of new wind power capacity. However, based on the timetable for the initial 700 MW allocation round,

wind energy is unlikely to play a significant role until closer to the end of the decade,

the analysis noted.

Electricity imports are concentrated in periods when prices are highest, while exports tend to occur during cheaper hours, when solar generation surges. Natural gas largely determines morning and evening price peaks, as more expensive gas-fired power plants set the market price during these periods. Evening prices of around EUR 150 per megawatt-hour primarily reflect the cost of natural gas and carbon emission allowances.

GKI also highlighted the wider competitiveness challenge facing European industry, which pays more than twice as much for electricity as its US counterparts and nearly 50 percent more than Chinese competitors.

Hungary’s electricity system faces additional cost pressures from grid surcharges and the cross-subsidization associated with regulated, reduced household energy prices, making electricity even more expensive than the European average, the institute said.

The greatest risk concerns nuclear power. The reactors at the Paks I nuclear power plant have been operating for 44 years, with their current operating licenses set to expire between 2032 and 2037. Extending their total operating lifetime to approximately 70 years may be possible, but would require environmental permits and significant technical upgrades. Given the uncertainty surrounding the completion of Paks II, any delays in extending the operating lives of the existing reactors could pose a serious risk to Hungary’s energy security, GKI warned.

The institute also stressed that

solar power’s dominant position among renewables increases fluctuations in electricity generation, making a more diversified energy mix and the development of storage capacity essential alongside the planned 4,000 MW wind power program.

As electrification advances, electricity demand is expected to continue rising. Achieving long-term energy self-sufficiency will therefore require not only renewable energy but also continued contributions from nuclear and gas-fired power plants, GKI concluded.

Via MTI, Featured image: Pixabay

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