Construction of Hungary’s Paks II to begin in February 26 January 2018 26 January 2018

Despite Austria’s protests, construction of the two new units at the Paks nuclear plant (Paks II) in Hungary will begin in February, Hungary’s Minister of Foreign Affairs and Trade Péter Szijjártó confirmed in a statement to the TASS news agency on 24 January. “There is [a] question that everything, including the construction projects, will be realised according to plan and according to the predetermined schedule”, he said. On 22 January, Austria announced that it would be initiating legal action at the European Court of Justice against the expansion of the Paks NPP.

The Paks plant currently comprises four Soviet-supplied VVER-440 pressurised water reactors, which began operating between 1982 and 1987. Under an inter-governmental agreement signed in early 2014, Russian companies and their international sub-contractors are to supply two VVER-1200 reactors for Paks supported by a Russian state loan of up to €10bn ($11.2bn) to finance 80% of the project.

Austrian Sustainability Minister Elisabeth Köstinger said Austria intends to sue the European Commission (EC) for allowing Hungary to expand Paks. "It is a wrong signal if the European Commission classifies subsidies for the construction of nuclear power plants as harmless to energy policy," she said in a statement by the Federal Ministry of Sustainability and Tourism.

Hungary received permission to begin construction of new units at Paks as planned, following EC approval last March Hungary’s commitment to limit distortions in competition. The EC concluded that Hungary's financial support for Paks II involves state aid, but that it could approve this support under EU state aid rules on the basis of these commitments.

In November, the EC cleared Hungary's award of a contract to Russian state nuclear corporation Rosatom to build the units after investigating issues related to procurement and whether project funding constituted state aid. However, a spokesman for Köstinger noted: "EU assistance is only permissible when it is built on common interest. For us, nuclear energy is neither a sustainable form of energy supply nor is it an answer to climate change." The deadline for filing a suit to challenge to the Commission's decision at the European Court of Justice is 25 February.

The first unit is scheduled to be completed in 2025 and the second in 2026. The Hungarian National Atomic Energy Office (OAH) issued the site licence in March 2017 after project company MVM Paks II received an environmental licence in September 2016. Rosatom subsidiary ASE Group, the general contractor for Paks II, earlier in January awarded GE Hungary, a unit of General Electric, a €793m contract to manufacture and supply the turbines for the two reactors.

Paks NPP is also extending the life of its four operating reactors. Units 1 and 2, have already received a 20-year licence until the ends of 2032 and 2034. In January 2017, OAH extended the operating licence Paks 3 by another 20 years until 2036 and is considering an application to extend the operating licence of unit 4 for until 2037.

The Hungarian Atomic Energy Authority reported earlier in January that the Paks units had operated safely during 2017 with 27 security-related events reported, all rated as Level 0 on the International Atomic Energy Agency’s Nuclear and Radiological Event Scale (INES). HAEA said its main challenge is to increase its staff numbers from around 170 to a target of 200, with specialists needed for processing permits for the Paks II units.