Brussels is seeking a change to the fuel supply aspect involved in the expansion of the Paks nuclear power plant in Hungary, but is not challenging the expansion of the facility itself.

Hungary last year granted Russia’s Rosatom a project to build two nuclear power blocks of 1200 MW each at the plant, financed partly by a favourably priced Russian loan worth 10 billion euros ($10.6bn).
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European authorities feared that the arrangement would increase Hungary’s already heavy energy dependence on Russia and EU officials also expressed concern that Moscow was using energy policy to divide Europe and undermine the bloc’s consensus on sanctions imposed on Russia over its actions in eastern Ukraine.

Budapest’s decision to award the bulk of contracts for the two nuclear reactors to Rosatom without a public competition prompted the commission to launch a probe into whether the deal violated public procurement and state aid rules.

However the extent of the challenge appears to be that the Euratom Supply Agency (ESA) – charged with nuclear fuel supply across the EU – has sought changes to the Paks supply deal, asking that players other than Russians be allowed to ship fuel to the plant in the future .

The European Commission delivered the official line on the matter at a press conference on Friday. There had been contradictory media reports suggesting Europe had blocked the plant’s progress, with alternative views provided by Russian media.

Anna Kaisa Itkonen (right), spokesperson for the European Commission on climate change and energy, told a press conference, “We are not blocking the construction of Paks, this is just the fuel supply agreement which is being dealt with by the commission.”
Anna-Kaisa Itkonen
“Last week we decided on a referral which was pursuant to Article 53 of the Euratom Treaty regarding the development. By taking this decision the commission fulfils our legal obligation in accordance with the Euratom Treaty and looks in particular to security of supply concerns when it comes to nuclear fuels.”

Itkonen added that the Commission could only comment on the case in a limited manner up to now because of confidentiality reasons because the documents on which the decision was taken by the full commission on the 2nd March are classified. The Hungarian authorities have since given their consent to declassify the documents and the Commission will publish a more detailed response on it decision in the coming weeks.

The Commission’s spokesperson said that the rationale for the decision did not apply to the Fennovoima project, which also has Russian involvement. She also fielded questions on whether the EU would review the Finnish nuclear power project, in line with its demands for more transparency and commission involvement on intergovernmental energy agreements.

“The Euratom Supply Agency looks at each separate case by their own merits so there is no connection between these two. To make a comparison between Fennovoima and Paks is difficult as the Paks plant files have been classified.”

“There will be no review of the Fennovoima project as it was not classified, it was deemed not problematic at the time, the conditions were different so there’s not a problem in that regard.”

The Hungarian government are confident that any complications are being worked out and that, the fuel issue apart, Europe is not standing in the way.

Hungarian prime minister’s chief of staff, Janos Lazar, told public radio that Hungary would press ahead with the project.

“It is not in the interest of Europe to block Paks NPPthis investment,” Lazar said. “Hungary needs nuclear energy … The European Commission understands this and accepts it, which is why it has accepted the Russian-Hungarian agreement.

“The (ESA) notified us that it would like other suppliers to be able to ship fuel to the nuclear plant,” he said. “This does not mean we will not choose the Russians.”

“There is a very good chance that shortly all questions will be answered,” he said. “The solution under preparation will be acceptable to the European Commission, Russia as well as Hungary.”

Dr Jonathan Cobb, Senior Communications Manager at the World Nuclear Association concurred with the view that consensus could be reached, telling Power Engineering International, “It’s positive that all parties are looking to resolve this issue swiftly. The new plants to be built at Paks will be a vital part of Hungary’s future low-carbon electricity supply.”

The four reactors currently in operation at Paks produce 40 per cent of the country’s electricity and the central European country relies on Moscow for 60 per cent of its gas imports and 80 per cent of oil imports.

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