The burgeoning field of geothermal energy presents both opportunities and challenges. To foster growth in this sector, Hungary has launched a significant initiative aimed at mitigating the risks associated with geothermal drilling. This program is designed to support businesses engaged in geothermal projects, particularly focusing on initial drilling and related preparations.
Overview of the Geothermal Risk Mitigation Scheme
The Hungarian government has introduced the “Reducing Geothermal Drilling Risks” program, known as KEHOP-Plusz-4.2.4-25. The first application phase opens from March 2, 2026, to April 30, 2026, followed by a second phase from September 14, 2026, to October 30, 2026. This initiative is crucial for stimulating investment in geothermal technologies and enhancing energy security.
Eligible Activities and Application Criteria
Eligible activities under this program include the drilling and investigation of the first well in a geothermal project aimed at energy production. Additionally, it encompasses preparatory tasks essential for project execution. Only entities that hold geothermal concession rights, exploration permits, and final construction permits can apply for support.
Financial Support Structure
Financial backing for projects ranges from a minimum of HUF 400,000,000 (approximately EUR 1 million) to a maximum of HUF 1,000,000,000 (around EUR 2.5 million). If a well is certified successful at the project’s conclusion, the support amount will be 10% of the total eligible costs. Conversely, if the well is unsuccessful, small and medium enterprises (SMEs) can receive up to 50% support, while larger firms may receive a maximum of 45%.
Self-Funding Requirements
Applicants must demonstrate self-funding that covers the project’s total costs minus the requested grant amount. This requirement ensures that companies are financially committed to their projects, promoting responsible investment and risk management.
Budget and Implementation Timeline
The total budget allocated for this initiative is HUF 10 billion (approximately EUR 25 million). Projects must be completed within 24 months of the grant agreement’s effective date, with a deadline set for December 31, 2028. Notably, the program is applicable across Hungary, excluding the capital city of Budapest, allowing for widespread regional development.
National Goals for Geothermal Energy
In line with the newly launched risk mitigation scheme, Hungary aims to increase its domestic geothermal energy usage by 20% by 2026, with aspirations to double output by 2030. Significant geothermal projects are already underway in cities like Szeged and Kiskunhalas, reflecting the country’s commitment to sustainable energy development.
Industry Engagement and Upcoming Events
The geothermal sector is actively engaging with various stakeholders to further enhance knowledge and collaboration. Upcoming events, including the IADC Geothermal Drilling Conference in November 2026 and the Taiwan International Geothermal Conference in March 2026, will facilitate discussions on advancements in geothermal technologies and project management.
The Path Forward for Hungary’s Geothermal Sector
The establishment of the geothermal risk mitigation scheme represents a strategic move by the Hungarian government to bolster the geothermal sector. This initiative not only provides financial support but also encourages innovation and collaboration among businesses. As Hungary progresses toward its geothermal energy goals, the impact of this program will be closely monitored.
Conclusion
Hungary’s geothermal risk mitigation initiative is a promising step toward enhancing the country’s energy landscape. By supporting the foundational stages of geothermal projects, the government is paving the way for sustainable energy growth. With a clear vision and structured support, Hungary is poised to become a leader in geothermal energy utilization in the coming years.
- Takeaways:
- The risk mitigation scheme opens for proposals in two phases in 2026.
- Financial support ranges from HUF 400 million to HUF 1 billion.
- Successful projects can receive a substantial percentage of funding based on well performance.
- Hungary aims to increase geothermal energy usage by 20% by 2026 and double it by 2030.
- The initiative excludes Budapest to promote regional development.
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