Energo: Rosatom clears last hurdle in Paks NPP project

Hungary’s nuclear authority OAH has given the final implementation license for the extension of the country’s sole nuclear power plant Paks, with an added capacity of 2,400 MW, local media reported on December 3

OAH granted the permit conditionally in August 2022, three years after it was submitted, but required revisions to a key document.

Without these, Paks II, the company in charge of the project could only launch foundation work at its own risk. Further progress depended on updating and resubmitting the preliminary safety report (PSR). OAH also requested an English version as well to address likely translation inaccuracies.

The regulatory approval means that the last hurdles have been cleared. 

The  Paks expansion is currently the biggest nuclear project with a building permit in the EU.

Hungary picked Rosatom without an open tender to build two VVER-1200 reactors with a capacity of 1,200 MW each, through an inter-governmental agreement between Hungary and Russia signed by Hungarian Prime Minister Viktor Orban and Russian President Vladimir Putin in 2014.

Construction was to start in 2017, but a protracted European Commission probe and tedious examination by local authorities concerning safety issues delayed the project by years. Hungary planned to complete the first reactor by 2025 and the second in 2026, which has been pushed back to the mid-2030s. Excavation work began years ago and the first concrete will be poured in early 2025, according to government officials.

Hungary’s sole nuclear power plant already provides half of Hungary’s electricity production and more than a third of electricity consumption.

The current four 500-MW power units were planned to be decommissioned between 2032 and 2037, but parliament last year approved the extension of the lifetime by another 20 years, which in theory means the last blocks could be operational until 2057. The decision was explained by growing electricity needs and possibly due to the delay in the current project.

The government maintains that the country needs nuclear energy for the security of supply and to meet its climate policy goals. Hungary's energy strategy relies on two pillars, nuclear and solar production. By 2030 some 90% of the country’s electricity production could be carbon-free.

Concerns have been raised about the potential additional costs of the new facility compared to the initial target. The 2014 agreement between Hungary and Russia set a €12.5bn budget, funded by a €10bn loan from Russia. The government said the budget was fixed and that Rosatom would bear the risks of cost overshoots.

However, last month, the government proposed an amendment in parliament allowing Paks II to adjust its general contractor agreement with the Russian state-owned company, which may entail raising the project's budget next year.

The final cost of the expansion remains uncertain. At a government briefing, cabinet chief Gergely Gulyas acknowledged that negotiations with Russia are ongoing. The final price could substantially surpass the original estimate, as other projects have shown in the past, local media observed.