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Support to Paks
back to contentsBesides that the government of Hungary reached an agreement with Russian Ministry of Finance about project funding conditions. Minister of Economy Mihaly Varga said the EUR 10 billion credit would be paid by Hungary within 21 years after putting to operation of the units in 2023. “We managed to reach an agreement we wouldn’t be able to get at the market”, – mass media quote Mr. Varga.
Energy industry and politics
During measuring of the agreement in Hungarian Parliament 256 members voted for it, 29 – against. The agreement was supported by fractions of the ruling national conservative party FIDESZ and Christian democrats, who control together more than 2/3 of votes and also by members of radical “Jobbik”. The only party that voted against the deal was green liberal LMP. It believes that the agreement puts Hungary in a very dependent position from Russian energy, since the country today already imports Russian gas.
The majority of Hungarian politicians are sure that the agreement with Russia is quite profitable for the country. Russian President said that more than 40% of works will be done by Hungarian companies, which means about $3 billion disbursement of Russian loan and $1 billion of tax revenues into the country’s budget. During the implementation of the atomic project 10 thousand jobs will be created in Hungary. According to Mr.Varga, the NPP extension project will add several tenth of a percentage point to the country’s GDP.
Hungarian mass media say that operation conditions of Hungarian project are similar to those of the Akkuyu NPP in Turkey, which supposedly means that at the first stage of construction the station will be managed by a Rosatom’s company. This is likely to be the stage when foreign investors are be allowed to buy company’s shares of not more than 49%. Credit repayment will be done with the help of the income from the NPP’s energy selling.
Prime Minister of Hungary thinks that the project’s denial by the opposition is but en element of political game on the threshold of Parliament elections of April 7. Mr. Orban is sure that there is actually no disagreement in atomic energy issue between the ruling party and the socialists; “and after April 7 you will support at least the operation of the Paks NPP again, if not its extension, in fact”.
Minister of Foreign Affairs Janos Martony, in his turn, said that the extension of Paks doesn’t have any geopolitical context; it is meant to support the country’s energy security.
Hungarian citizens support the extension, according to the Nepsabadsag newspaper, referring to a poll conducted by Nezopont. Almost all the respondents (89%) heard about signing of the agreement with Russia concerning new units of the Paks NPP; 52% believe it necessary; 25% spoke against, while the rest 23% couldn’t answer the question. 42% called the agreement profitable for Hungary; unprofitable – only 23%.
Familiar project
Paks is the only working nuclear plant in Hungary, it produces 42% of the country’s produced energy. The decision of building two more units were made in 2009; they are expected to be put into operation between 2020 and 2030.
For plant extension Hungarians chose Russian AES-2006 project. The VVER-1200 reactor used there is the same type of rectors that already are at the Paks NPP, so it would be easier for personnel. AES-2006 is a project of the new 3+ generation with improved technology and economy.
From safety point of view the project suggests fulfillment of the requirements of Russian scientific and technical documentation and maximum following the IAEA recommendations. The project’s main feature is using additional passive safety systems combined with active traditional systems. There is protection against earthquakes, tsunami, hurricanes, plain crashes. Among new improvements are double containment, a core melt trap, located under reactor vessel and passive system of residual heat removal. The project is based on plants with light water reactors (VVER) that proved their efficiency during thousands reactor-years of accident-free work.
Expert Opinion
Russian-Hungarian intergovernmental agreement, approved by Hungarian Parliament, concerning construction of two new power units, is a progressive step which contributes to better Hungarian competitive ability, believes Zsolt Harfas, «AtomenergiaInfo.hu» expert.
According to him, the competitiveness of Eurounion depends on affordable cost of electric energy.“Natural gas is three times more expensive in Europe than in the US and the cost of electric energy is twice higher than overseas. In energointensive industries Europe’s share is 30% of global scale. Because of energy price growth this figure can reduce to 10%. Taking into consideration this fact Hungarian government decided to build two new units of the Paks NPP-2, that will help to provide people and industry with affordable energy. What is highly important is that the step was made exactly on time to provide competitive advantage for Hungary in the region. Affordable energy can be attractive for energointensive market investors“- says the expert.
The nuclear energy opponents‘ reason against is that Hungary is apt for two directions in future – either nuclear energy or renewable sources. This approach is not quite fair. The only true way is using both nuclear energy and renewable sources, in fact.
It’s quite obvious that the capacity of the Paks plant can’t be replaced by renewables. Thus, for Paks it would mean that, to replace two 2000MW units, one should introduce solar bateries of 14400 MW. Taking into consideration the latest data, for this they would need HUF13 210 billion, while for Paks the sum is HUF 3000 billion. Solar generation projects may pay off in 15-20 years in a way that the investors get 60% of investments as the EU subsidy and from Hungarian national funds. Besides, the cost of solar energy is three times higher than that of Paks.
According to the expert, Rosatom offers power units of 3+ generation with competitive price, which is provided by their serial production, terms observation and nuclear energy features. It is true that new atomic plant means big investments. However the competitiveness of new units is guaranteed by long term service and low operation costs along with permanently low costs of nuclear fuel. NPP production expenses are divided to 60-70% of investment money and 8-15% fuel expenses. Taking into consideration technological and economic parameters (EUR 10 billion credit, disbursement term of 21 years after putting to operation, annual rate of 4,5%, 2400 MW capacity, 92% load factor and guaranteed life term of 60 years), the self- cost of the Paks NPP-2 energy will be HUF17 for 1kW/h, which is more competitive than other types of generation. To estimate the project it is important to mention that, according to the government, the cost of Russian credit doesn’t influence the cost of energy produced by Paks2, which means that the major part of energy’s self-cost – 60-70% – won’t influence the self-cost of energy produced. In fact, new units would produce competitively costing energy even if the credit influences the cost. After paying the credit, taking into consideration the plant’s 60-years guaranteed life-term, it will work even more competitively for minimum 39 years more, since by that time the station will already pass through amortization. New units of the Paks NPP-2 give an incredible opportunity for Hungarian economy to acquire its driving force for another 60 years’ term.