The European Commission has cleared the financial support offered by Hungary for the construction of two new nuclear reactors in Paks (Paks II).
Hungary plans to grant investment support for the construction of two new reactors on the Paks site in Hungary. This state aid was approved because the amount of aid is limited and proportionate to the objectives pursued, while the distortion of competition caused by the state support is minimised. Indeed, Hungary has committed to avoid overcompensation of the operator of Paks II (profits earned by Paks-2 will be used to cover normal operation costs or to repay Hungary for its investment), to avoid market concentration (functional and legal separation of Paks II and national power utility MVM) and to ensure market liquidity (30% of the power generation will be sold on the power exchange).
The Paks nuclear expansion project aims to add two new 1,200 MW Russian-built VVER-1200 reactors on the site of the existing nuclear facility (four VVER-440 PWRs commissioned between 1982 and 1987). In January 2014, Hungary signed an agreement with Russia, which would finance up to 80% (or €10bn) of the project, build the two reactors on a turnkey basis and supply nuclear fuel over a 20-year period while handling and storing spent fuel elements in Russia. Construction of the Paks expansion is expected to start in 2018, with commissioning scheduled in 2025-2026.
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