Hungary strengthens energy co-operation with Russia

13 April 2023

During a visit to Moscow, Peter Szijjártó, Hungary’s Minister of Foreign Affairs & Trade held lengthy talks with Deputy Premier Alexander Novak on general energy issues, and with Rosatom Director General Alexey Likhachev on the Paks-II NPP project.

“The security of Hungary's energy supply requires uninterrupted gas transport, oil transports and nuclear fuel transports,” said Szijjártó on his Facebook page. “In order to fulfil these three conditions, Hungarian-Russian energy cooperation must be uninterrupted. This is not a matter of political preference, but a matter of physics.”

Rosatom said the parties discussed further steps to implement the Paks-II NPP construction project, as well as other aspects of comprehensive cooperation in the nuclear sector. “Now, at the site of the future Paks-II station, preparatory work is underway to erect auxiliary buildings and structures. The process of obtaining licence documentation for certain types of work and equipment manufacturing is ongoing. The main licence for the construction of the Paks-II NPP was issued by the Hungarian regulator in August 2022.”

Russia's nuclear sector has so far avoided EU sanctions because Rosatom still supplies fuel to reactors in several member countries, including Finland and Bulgaria. Hungary's Paks NPP comprising four Soviet-built VVER-440 reactors supplies some 40% of Hungary's electricity. These reactors use fuel supplied by Rosatom’s TVEL and Rosatom is also constructing two new VVER-1200 reactors (units 5&6) at Paks-II. The Paks-II project was launched in 2014 by an inter-governmental agreement between Hungary and Russia. The contract was supported by a Russian state loan to finance the majority of the project.

In October 2021, Rusatom Automated Control Systems JSC (a subsidiary of Rosatom) and the Framatome-Siemens consortium signed an agreement for the manufacture of automated process control systems (APCS) for the two reactors. However, Germany has been blocking delivery of equipment. Szijjártó said in March that the Framatome-Siemens consortium had received an order for the manufacture and commissioning the APCS and that the French government had given Framatome permission to supply the technology. In Germany, however, Vice Chancellor, Minister for Economic Affairs & Climate Protection Robert Habek, as well as Foreign Minister Annalena Baerbock were blocking Siemens participation. He said he would look to Framatome or Rosatom to provide the required equipment instead.

During his trip to Moscow, he said agreement had been reached to amend the construction and financing contract for Paks-II. “Regardless of the war and the sanctions, life and the technological situation have changed so much that contracts had to be amended,” he said on Facebook. “We have gone through long negotiations, but today we have reached an agreement on all the necessary issues that guarantee that we can carry out the investment, protect Hungarian families' overhead reductions and the Hungarian economy from completely insane price changes.”

He further said Brussels had realised that “there is no energy security and there is no European green transition without nuclear energy”. He added that Hungary was “well aware that a nuclear power plant is indispensable for affordable and safe energy”. He added: “We have to push for Paks-II to be built as soon as possible despite all kinds of difficulties, because the sooner the new units are built, the sooner we will be protected from the completely insane price movements of the international energy market.” In January, Hungary's Energy Minister Csaba Lantos said the Paks II plant was now expected to be completed in 2032.

Image courtesy of Rosatom

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