The Hungarian geothermal energy market is expected to witness a CAGR of more than 10%, during the forecast period. The primary driver for the market includes government initiatives, to reduce the dependency on energy imports from foreign nations. However, factors, like high electricity generation cost from renewable sources, including geothermal energy in Southeast European countries, are expected to hinder the market growth during the forecast period.

With the significant presence of district heating facilities in 23 towns of Hungary as of 2018, direct heat utilization is expected to dominate the market during the forecast period.

Hungary lies in the Pannonian basin, an area nearly surrounded by the Carpathian Mountains. In Europe, the Pannonian basin stands out as a positive geothermal anomaly, with heat-flow density ranging from 50 to 130 mW/m2, a mean value of 90-100 mW/m2, and a geothermal gradient of about 45 °C/km. 

Moreover, the country has two geothermal reservoirs: a basement reservoir and a basin-fill reservoir. The basement reservoir is in use for direct heat purposes, and the basin-fill reservoir is expected to hold a temperature of 100-120°C, which is expected to have preferable conditions for the development of combined heat and power (CHP) plant installation. Thus, the potential to install CHP plants is expected to create an opportunity for the power generation application to grow, in the future.

With regulatory changes and ongoing and upcoming project, geotherma- based power production is expected to drive the market growth, during the forecast period.