Hungary's Paks II Nuclear Project Back on Track

Written by Martin Lynch, European News Editor for Industrial Info (Galway, Ireland) - Hungary's €10 billion ($13.6 billion) nuclear power plant (NPP) project at Paks is back on track after the European Union's (E.U.'s) nuclear watchdog approved a contentious fuel supply deal.

Euratom has approved a nuclear fuel supply deal between Hungary and Russia for the Paks II nuclear project after raising the issue with the European Commission (E.C.). The decision removes one of a number of problems the Commission has with the Russian-dominated build. Last month, Industrial Info reported on how the E.C. had launched an investigation into possible anti-trust violations, especially with regard to the contract being awarded without a tender procedure. For additional information, see March 2, 2015, article - Hungary's Paks Nuclear Deal Faces European Investigation.

János Lázár, chief of staff to Prime Minister Viktor Orbán, said the agreement between Hungary, Russia and the E.U. was a "milestone, and a step forward in the efforts of the Government to reduce the price of electricity". He explained that Hungary has concluded three agreements with Russia: on the construction of the nuclear power plant; on its operation; and on the supply of nuclear fuel for the facility. He added that the European Commission's direct approval was necessary for the third agreement on fuel supply.

He confirmed that the Government is still in discussion with the European Commission over the other two agreements with regard to competition law and procurement. The project will not be delayed, Lázár assured media, with construction slated to start in 2018.

In December Hungary signed a series of implementation contracts with Russia's Nizhny Novgorod Engineering Company Atomenergoproekt (NIAEP) (Moscow, Russia) for the construction of two new 1,200-megawatt (MW) nuclear reactors for Paks II. For additional information, see December 17, 2014, article - Hungary-Russia Sign Nuclear Contracts.

Located about 100 kilometers (km) south of Budapest, the existing Paks plant is Hungary's only nuclear power plant, based around four VVER-440 type reactors from Russian company AtomEnergoExport. They generate 2,000 MW annually and supplied just over half of Hungary's total electricity demand in 2013.

Russian money and companies are behind the Paks II project. Last July, the Hungarian government approved a €10 billion ($13.6 billion) financing package from Russia to build the new reactors. For additional information, see July 11, 2014, article - Hungary Signs €10 billion Nuclear Deal with Russia.

Lázár said he was pleased that his government was able to convince the Commission that the agreement [between Russia and Hungary] is about "Europe's security of energy supply and Hungary's energy and gas independence, and not about increasing Hungary's dependence on Russia".

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