Hungary must invest in energy efficiency: IEA

London (Platts)--3Apr2007

Hungary must invest in energy efficiency, Claude Mandil, executive
director of the International Energy Agency, said Tuesday as the IEA published
its 2006 review of Hungary.

Hungary has a very high dependence on gas, the IEA said, but is not using
it in an efficient manner. "The Hungarian government needs to focus on
ensuring high levels of investment in improving the efficiency in all sectors
of the economy, particularly home heating and power generation," Mandil said.
"Furthermore direct financial support for renewables and combined heat and
power plants is very high in Hungary, and unlikely to be cost-effective."

The IEA said that reforms must also be implemented ready for full market
opening in July 2007. "Further steps in market reform are urgently required,"
the IEA said. "At this point in time, there is no clarity about the system
under which the market should operate after its full opening, or about its
date of introduction."

The government is also offering a household gas subsidy that reduces the
price of using gas. The government should consider reducing the subsidy and
replace them with a different form of payment to avoid social hardship, the
IEA said.

Old power stations need to be replaced in the gas-to-power sector and in
the residential sector improved insulation could cut gas use, the IEA added.