The Hungarian National Atomic Energy Authority has granted Hungarian power utility MVM the site license required for the construction of two new units at the Paks nuclear power plant (NPP).
The Paks NPP currently encompasses four MW VVER-440 PWR units, which started operations between 1982 and 1987. At present, they account for half of Hungary's electricity generation.
The Paks nuclear expansion project is conducted by the project company Paks II and aims to add two new 1,200 MW Russian-built VVER-1200 reactors on the site. In January 2014, Hungary signed an agreement with Russia, which would finance up to 80% (or €10bn) of the project, build two 1,200 MW reactors on a turnkey basis and supply nuclear fuel over a 20-year period while handling and storing spent fuel elements in Russia. The construction of the Paks expansion is expected to start in 2018, with commissioning of the two units scheduled respectively in 2025 and 2026.
In November 2016, the European Commission (EC) ended part of the proceedings against Hungary related to the construction contract, awarded to Rosatom (Russia) without any public tender. In March 2017, the EC approved the project and the Hungarian state aid 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).
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