György Palkó: One step closer to Budapest Without Chimneys

District heating is the most sustainable way to heat the capital

Interview with György Palkó, the CEO of the Hungarian Veolia Group, published by Világgazdaság

CHP Erőmű Zrt., whose major shareholder is Veolia Energia Magyarország Zrt., acquired Budapesti Erőmű Zrt. (BERT) in December 2020. The power plant of Budapest produces 60% of the heat energy needed by the capital city. It means a long-term and close cooperation with Főtáv (the district heating service supplier of Budapest). The ultimate goal is to make Budapest a city without chimneys, which is to be reached step-by-step with sustainable and modern solutions. BERT with its 220 employees was integrated into Veolia during 2021. The most important task of the year – said György Palkó, the CEO of Veolia Energia Magyarország Zrt. - was to set up the synergies between Veolia and BERT, with focus first of all on the integration of the supporting functions.

The target of the Veolia Group is to be present with the widest range of instruments on the market of the ancillary services and to find and apply the most efficient solutions possible when fulfilling the consumers’ needs. „In our experience, due to the electrification of information technology and transport, there is a growing demand for electric energy, which is becoming increasingly difficult for producers to meet. To avoid such a situation, Veolia had already entered the regulatory market by purchasing CHP Energia Zrt., thus its units organized in virtual power plants can react immediately to the changing consumers’ needs. The three combined-cycle gas turbine power plants of BERT play a special role in this system, because the natural gas-fired operation can provide balancing energy under any weather conditions.”

With the integration of BERT, Veolia has reached an 815-megawatt electric capacity, making it a major actor in the market of electricity. With BERT in its portfolio, Veolia Energia Magyarország Zrt. produces 60% of the district heat demand of the capital, supplying 144,000 households, 500,000 residents.

The cooperation is advantageous for both FŐTÁV and Veolia because a district heat system’s operation depends on a reliable heat production background, and the power plant depends on a long-term solid heat market. „We intend to tighten the relationship between the two companies, since we believe that district heating is the most sustainable way to heat the capital’s flats. We are proud to have FŐTÁV among our partners, because Veolia is the biggest actor on the Hungarian competitive market that produces and supplies heat at the same time, and the experience gained in this field are considerable. We are engaged with FŐTÁV on a long term, since Budapesti Erőmű Zrt. is the most suitable to answer the capital’s district heat needs. The long-term heat purchase contracts will, of course, change slightly, but we do not anticipate any essential changes.”

Each year Veolia spends several billion forints on modernising and maintaining its power plants’ equipment. Thanks to the improvements of recent years, BERT not only managed to burn less natural gas, but it also reduced its carbon dioxide emission.

„Our long-term goal by implementing modern and sustainable infrastructure developments is to make more steps towards Budapest Without Chimneys.”

The net turnover of BERT reached almost HUF 64 billion in 2020. Thanks to is extremely professional and committed team, the company met the expectations. BERT follows a pre-set production model meaning that the gas purchase contracts are concluded at least one year ahead, at fixed prices, so the currently high gas prices do not affect the company for now.

For the full interview, please go to