Green energy and regional development

Gergely, Sándor

Keywords: energy efficiency, renewable energy, employment, regional development, green energy scripts

Hungary’s GDP indicators in terms of energy efficiency reflected on consumer spending parity, falls behind the EU’s older member states. We are in the top half of the field of 12 states that have joined since 2004. The situation is also similar with regard to CO2 burden indicators.

There has been a breakthrough in recent years in end-user energy consumption from renewable energy sources. This was made possible by the mass utilisation of power stations supporting green energy – fuel wood – realised as a result of the interests created by legal and economic regulation. Last year Hungary achieved the ratio of renewable energy utilisation it had undertaken to reach by 2010. At the same time, this represents only a fraction of the domestic possibilities. In the transformation of arable land utilisation, a determining factor has been the drastic deterioration of the exchange rate, expressed in oil, of agriculturally produced basic foodstuffs; six-fold in the case of wheat, eight-fold for corn and eleven-fold for beef, over a period of 30 years.

The positive effects of green energy production on regional development come into their own if the producers band together into producer groups, which in turn form clusters with the service providers and utilisation companies. This system is supported by the scientific and local government background institutions. In the long term, the fundamental elements of a balanced, integrated partner relationship are self-restraint by stronger partners, the proportional sharing of work, capital and risk, and obligatory contractual discipline for all.

The production and utilisation of green energy carriers most affects regional development through increasing regional competitiveness, which manifests itself in the improvement of the conditions and effectiveness of: social structure, decision-making centres, quality of the environment, social cohesion of the region, economic structure, culture of innovation, regional accessibility, institutional and social capital, operation of SMEs, foreign investment, infrastructure and human capital, R&D, level of employment, labour productivity, income of regional areas and towns, and finally, improvement in the quality and standards of life for those living in the countryside.

Local or centralised utilisation of green energy has differing effects on regional development. Local utilisation is more advantageous for population retention and employment than centralised utilisation.

We present the scripts for three green energy programmes, of which the first ties up 440,000 hectares of arable land, the second 880,000 ha., and the third, 1,370,000 ha. The number of jobs newly created or retained changes from 22,841 to 68,226, in so far as we calculate wood’s green energy carrying proportional energy price in relation to the tax-free price of diesel fuel. However, if we calculate using the price of fuel wood valid in April 2006, then the number of newly created or retained jobs changes from 10,469 to 30,270.