Stories
Success story: Budapest’s cultural scene is leading an energy revolution
Community energy is key to action on the climate crisis. It can empower people, boost local economies, and reinvigorate communities. Community-led initiatives play an important role in the transition towards a 100% renewable and just energy future. Success stories of community energy projects can be found all over Europe. At REScoop.eu, we want to highlight these stories to further accelerate the movement towards a cleaner and democratic system.
This month we travel to Budapest, Hungary, to explore two new energy communities sprouting from vibrant cultural and social communities. We talked about their inspiring work, the barriers they face, and their plans for the future.
Budapest’s cultural scene: fertile ground for community energy
On the right bank of the Danube, Jurányi is more than just an independent theatre. This cultural community centre brings together theatre groups, galleries and associations, and organises dancing performances and events for families and young people. It’s also the birthplace of one of the first energy communities in Hungary. In a few weeks, its new 60 kW rooftop solar plant will be connected to the grid, with membership opening later in the year.
The new energy community’s future is promising. Its creation was the result of collective efforts and a crowdfunding campaign involving local artists, including actors and stand-up comedians. Its ten-year lease with the municipality of Budapest ensures stability, and in parallel with energy generation, it aims to reduce its consumption: an initial energy audit led to modernising the building’s boiler and investments in the building’s insulation are planned.
Jurányi’s solar plant is the first energy generation project of Közösségi Energia Szolgáltató (KESZ, Community Energy Service). The non-profit was founded by environmental NGOs in 2022, after a decade of parallel efforts to establish energy communities, to collaborate, support emerging projects and build a movement for energy democracy.
“We started from the local needs, and built a community from there,” Ákos Éger, managing director of the organisation, explained. Their efforts are finally paying off: Jurányi is just one of seven initiatives that are under way.
A radio station, community daycare, concerts… and a new solar plant
Another new energy community can be visited just across the Danube, in Budapest’s Kazán Community House, where the Kazán Energy Community installed a new 36 kWp collective rooftop solar plant, providing electricity for the building. This lively, collectively-owned cultural and social hub located in a post-industrial space houses a community daycare, an independent radio station, a media outlet, and offices for civil society organisations. It hosts workshops, concerts and events that connect neighbours and foster social inclusion.
The energy community brings together 9 members from the building. Since its launch in 2022, it has thrived thanks to collective decision-making and strong community values. The solar plant was funded in part by small community donations, and its income finances a democratically-managed fund to invest in the building’s insulation. Eszter Úr, an associate at one of the founding organisations, the Solidarity Economy Center, explained how the idea was born out of collective reflections: “We started by creating a network for all solidarity economy initiatives in Hungary, to form reading groups and share knowledge about alternatives. All organisations were involved as the idea emerged.”
The strength of the group enables Kazán to ride out storms: in response to the energy crisis, collective energy saving measures reduced their energy consumption by nearly 50%.
A challenging legal context
The success of both energy communities comes after years of work in uncertain contexts, as Covid-19 and fluctuating energy prices shook the country. But the biggest challenge named by energy communities was navigating Hungarian legislation and its frequent changes. Indeed, setting up an energy community in the country is a challenging venture.
The energy system is highly centralised: large nuclear and fossil power plants leave little space for smaller, democratic projects. The transposition of new EU energy laws also raised challenges for citizen projects: initially, legislation excluded activities like heating and cooling, and the definition of energy communities limited the legal forms they could adopt.
More recently, the phase-out of annual net metering raised significant obstacles for most energy communities, as entire business models must be reworked. “In our pilots, we often feel like we are flying blind,” Ákos from KESZ, said when describing their planning efforts.
Another significant challenge for energy communities is the market structure: electricity prices for households are heavily subsidised by the state – a powerful incentive to keep energy contracts with traditional suppliers. Generous government subsidies for households to fund private solar panels also make it difficult for energy communities to defend an alternative model of collective, democratic ownership. Faced with these limitations, energy communities turned to institutions that don’t benefit from these advantages: municipalities, NGOs, or SMEs, building strategic relationships with these partners to set up new projects.
Energy communities are closely following upcoming policy developments as new possibilities and opportunities could emerge. Solidarity Economy Center, founding member of Kazán, is particularly interested in developments around a new legal framework for energy sharing. To help push legislation in the right direction, KESZ also fosters conversations between stakeholders, DSOs, and policy-makers, viewing cooperation and mutual understanding as crucial to improve legislation. “Growing our movement helps us build a critical mass to push for better laws”, Bence Kovács, a community energy expert in KESZ points out.
Building the movement for energy democracy
Whatever the legal developments to come, community-building work makes Hungarian community energy pioneers hopeful. Ákos, from KESZ, explained their perspective: “We’ve learned not to worry too much about laws – those can change – we focus on building a strong core, based on a strong common understanding.” KESZ is especially focused on helping energy communities emerge, organising workshops and field visits, and offering technical advice and direct support. To maximise reach, they developed an online knowledge hub to support groups interested in starting a project. The organisation is also in discussions with other municipalities of Budapest to initiate more solar rooftop initiatives. Meanwhile, Kazán Energy Community is planning deeper building insulation financed by the solar plant itself. Despite challenges, old and new, the Hungarian journey to energy democracy is only just beginning.