Addressing the 69th General Conference of the International Atomic Energy Agency (IAEA) Hungary’s Minister of Foreign Affairs & Trade Péter Szijjártó said: “Despite all attempts to kill our project, Hungary is accelerating the construction of its new NPP with which we will be able to connect 2,400 Mwe to the national grid by two reactors at the beginning of the next decade.”
He was speaking after the European Court of Justice declared government subsidies to Hungary for the expansion of its Paks nuclear power plant not to comply with EU regulations, overturning the decision of the court of general jurisdiction and annulling the decision of the European Commission to approve state aid to Hungary for the construction of two new nuclear reactors.
The European Commission (EC) subsequently said it will re-evaluate the financing of the Paks-II expansion project. EC representative Olof Gill told a briefing in Brussels: “We will certainly now carefully analyse and study this ruling before deciding on further steps. From a legal point of view, we have returned to the preliminary stage, that is, to an open formal investigation [at EC level].”
The EU decision came after the US government in July lifted sanctions which affected the expansion of the Paks NPP. A Foreign Ministry statement noted that the previous US Administration led by Joe Biden had taken a number of political decisions that placed Hungary in a difficult situation. “With one of these sanctions’ measures, they tried to make Hungary’s long-term safe energy supply impossible by implementing restrictions on the construction of the Paks NPP that made it practically impossible to continue construction, Szijjártó said.
However, recently during meetings in Brussels, US Energy Secretary Chris Wright said it would be preferable for Europe to get its supplies from “its friends”. As well as displacing Russian gas, Wright called for European countries to find alternatives to Russian atomic power, saying “we want to see nuclear technology coming from the United States or within the EU itself”.
The Paks II project was launched in 2014 by an inter-governmental agreement between Hungary and Russia for two VVER-1200 reactors to be supplied by Rosatom. The contract was supported by a Russian state loan to finance the majority of the project. The Hungarian Atomic Energy Authority issued the licence for the units in August 2022. The Paks NPP comprises four VVER-440 power units launched between 1982 and 1987. Paks currently provides half of all generated and one third of the consumed electricity in Hungary.
Szijjártó told the IAEA General Conference: “Given our geography and our historical experience, we are super interested in a civilised East–West cooperation to be re-established. Hungarians can serve as a good example, that nuclear energy can really be the platform based on which civilised East–West nuclear cooperation is possible. This is also supported by the fact that, in addition to Russia’s Rosatom, there is a significant contribution of French and German subcontractors working on the construction site in Paks, and an agreement was recently reached on the exclusive use of American technologies for small modular reactors (SMRs).”
Szijjártó also warned that humanity is currently living in an age of danger, with the world facing serious security and economic challenges related to the need for an uninterrupted and affordable energy supply. In this regard, he listed some basic principles, first of all, that energy supply is not of a political-ideological nature, but a physical and geographical issue, because infrastructure and location determine where, from whom and what energy sources a given country can buy. He stressed that a country’s national energy mix is a national competence and that each country has the sovereign right to decide on it.
Szijjártó said the security of energy supply of any state should not be threatened by sanctions, and discussions about energy security should be based on facts and expertise, not on some political approach. Finally, he noted that in the wake of the electrical transition in transport, the increasing need for cooling and heating, the creation of large data centres, much more electricity would be needed in the future. He said it was essential that the expanding energy demand must be met in a reliable, safe, cheap and environmentally friendly way, criteria which are currently met only by nuclear energy. He stressed: “Any attempt to counter nuclear power threatens future secure energy supplies.”
While in Vienna, Szijjártó signed an agreement with the Chinese Atomic Energy Agency, which, he said, represents a great step forward in the fields of nuclear energy, security and innovation. He also said that he had reached an agreement with Rosatom Director General Alexey Likhachev to speed up the Paks II expansion.
Earlier, János Bóka, Hungary’s minister responsible for European Union affairs, said there are no legal obstacles to the continuation of the Paks expansion despite the EU court decision. Rosatom also issued a statement in which it gave assurances that, regardless of the court decision, it would continue to implement the Paks-II project together with Hungarian partners.
“Rosatom, together with Hungarian partners, continues to implement the Paks-2 nuclear power plant project. The project is important for the Hungarian economy; the commissioning of a nuclear power plant will provide the country with a stable source of affordable electricity. For the state corporation Rosatom, the primary task remains to carry out the project in accordance with the highest international safety standards and in full compliance with contractual obligations.”
In 2017, the EC had approved the investment aid which Hungary intended to grant to the state-owned company MVM Paks II for the construction of two new units at the Paks site. These new reactors were to gradually replace the four currently in operation. The construction was planned to be financed entirely by the Hungarian state. Russia also agreed to provide Hungary with a government loan to finance most of the construction.
Austria challenged the decision of the European Commission in the EU Common Court in November 2022. However, the court rejected the claim, after which Austria appealed to the European Court of Justice, which has now ruled.
The ruling states: “Contrary to the position of the General Court, the Commission could not confine itself to verifying that the disputed aid complied with the EU rules on public support, but also had to make sure that the direct award of the contract for the construction of the two new reactors complied with the EU rules on public procurement.” Moreover, “since the Commission argued in its decision that the direct award of the contract was in any case in accordance with the procurement rules, this decision was not sufficiently justified”.
At a joint press conference with Austrian counterpart Beate Meinl-Reisinger, Szijjarto noted: “Before the opponents of Hungary and of Hungarian energy security open the champagne, I want to make it clear that the European Court issued a decision against the European Commission, annulling one of its earlier rulings. This does not limit or slow down the implementation of the project.” He stressed that the government continues to regard the Paks expansion as the cornerstone of the Hungary’s future energy security. “This court ruling in no way restricts or slows the progress of the investment. On the contrary, in recent months we have accelerated the project,” he underlined.
