MASARYK UNIVERSITY BRNO

Faculty of Social Studies

Department of International Relations and European Studies

Paks 2 The Future of Nuclear Energy in Hungary

Final paper
MEB418 Energy Security of the Visegrad Countries

Author:

Dniel Pter (432433)

M.A. in European Politics

Brno, 7 May 2015

Introduction
According to official statistics from 2013, 36.4% of the gross electricity consumption and 50.7% of
the domestic production in Hungary was covered by nuclear energy. Both numbers indicate that
nuclear power is not only a fundamental source of the Hungarian electricity supply, but it also
constitutes the biggest single source compared to fossil-based production. (MAVIR, 2014: 9) The
sole provider of domestic nuclear energy today is the Paks Nuclear Power Plant, with four blocks
producing 2000 MW nominal capacity altogether. As the blocks were built in the 1970s and were
connected to the energy grid between 1982 and 1987, their already prolonged lifespan will
terminate between 2032-2037, bringing about a huge gap in the Hungarian electricity production for
the upcoming decades. (MVM, 2015a) The situation will further be exacerbated if we consider that
the majority of the current production facilities in the Hungarian electricity system (mainly those
based on coal and other fossils) are already out-of-date and are going to be closed down in the near
future. (Cserhti et al., 200?: 1) When the general energy forecasts for the 2030s count on a definite
need for newly installed energy producers with around 5000-7000 MW capacity 1, it is not a surprise
that serious preparations had to be initiated in order to solve the problem of a future energy
shortage.
Thus, the debate has begun between those, who would like to substitute the missing supplies
with more traditional and nuclear-based energy in a centralized structure, and those who'd rather
imagine more radical changes in the composition of electricity production, mainly based on
renewable energy sources with a more flexible system. In this debate, both the previous socialistliberal and the current conservative government have made their stand in favour of nuclear energy
and the expansion of the current capacity of Paks NPP specifically. With a law enacted in 2009 by
the National Assembly (and supported by 98% of the MPs present), the parliament has given the
green light for the preparations of constructing new blocks. 2 However, the Hungarian public and the
opposition parties were equally astonished, when Prime Minister Orbn has signed an agreement
with President Putin in January 2014, without preliminary debate, previously published impact
studies or even a public tender, entrusting Rosatom with the construction and receiving 10 billion
EUR loan from Russia. (Index, 2014a) Since then, the issue of Paks2 has only become more
controversial and has been subject to constant criticism from opposition parties, NGOs, various
anti-corruption and green initiatives. Meanwhile, pro-nuclear groups, specialists, members of the
ruling party and the government have been trying to emphasize the long-term beneficial effects; the
main argument being the guarantee for cheap electricity prices and predictable production.
The aim of this short paper will be to present the main arguments of both sides and to reach a
1
2

Based on three different sources. See Aszdi (2014: 6), MVM (2009: 2) and Cserhti et. Al (200?: 1)
25/2009. (IV. 2.) OGY hatrozat. Accessible: http://www.complex.hu/kzldat/o09h0025.htm/o09h0025.htm

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conclusion, whether the construction of the two new blocs will indeed bring cheap electricity and a
safe way to tackle Hungary's energy demands, as proponents suggest, or rather, it will make the
Hungarian state budget indebted for generations, make Hungary's dependence on Russia even
tighter and bring any attempts for turning to renewable sources impossible in decades to come. The
presented arguments will be divided into two main parts, revealing two different aspects of Paks2,
thus making a comparison easier. The used sources include official statistics and statements,
working materials from related NGOs, opposition parties and newspaper articles. As the nuclear
debate in Hungary has mainly been concentrated on domestic level, this paper will hopefully
contribute to the so far scarce literature written in English.

1. Nuclear vs. green energy in Hungary general arguments

One of the most important aspects of the Paks2 debate does not directly relate to the construction
itself, but tackles the more theoretical question of the use of nuclear energy per se. The effectiveness
and safeness of nuclear power and its perspectives in the Hungarian economy had spurred
discussion much before the deal with Rosatom was made public, as the above-mentioned
parliamentary decision in 2009 has already set the board for a possible expansion. Accordingly, the
Hungarian Power Company (MVM)3 has issued a number of brochures to propagate the idea of
expanding the current capacity. Among their arguments they mention the long service time of the
power plants (at least 60 years), the lack of harmful emission, the low risk of industrial accidents,
the cheaper price of fuel and the ample sources of uranium. (MVM, 2009: 4) Similar ideas were
presented at a public debate in 2011, by Attila Aszdi4. Contradictory to his opponent's opinion a
representative of Greenpace Hungary the professor has argued that the renewable energy sources
will not be able to replace nuclear energy in the next decades, as the former are not adjustable
enough to provide a country's basic supply. Moreover, he rejected the suggestion that the anticipated
decline in the prices of renewable energy would automatically lead to a cheaper electricity price for
the consumers, as the expenses of transport would still make it more expensive and less
competitive. (Aszdi & Rohonyi, 2011)
On the other hand, during the same debate, Mr. Rohonyi from the Greenpeace has come up
with arguments that emphasized the dangers of radioactive waste that has to be stored for thousands
of years, the possibilities of disastrous accidents and their direct danger to the population, and the
huge costs of constructing power plants which only produce for a few decades, as opposed to the
limitless energy sources of solar and wind power. (Aszdi & Rohonyi, 2011) According to a report
from 2011, Greenpeace also argues that coal and nuclear power plants are the main obstacles that
3
4

The MVM Zrt. is the sole operator of the Paks NPP and a key player in the Hungarian electricity sector
Prof. Attila Aszdi is the head of Institute of Nuclear Techniques at the Budapest University of Technology and
Economics. In July 2014, he has been appointed as Government Commissioner for maintaining the performance of
Paks NPP

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stop renewables to take priority in electricity production, therefore, they have to be phased out by
2030. (Greenpeace, 2011: 12)
Apart from Greenpeace, other Hungarian organizations and political groups have expressed
faith in a more renewable-based, nuclear-free energy portfolio. Energiaklub (Energy Club), a
climate policy institute issued a 40-page document titled The World Without Paks II, in which
they proposed an energy model for the year 2030 without the two new blocks, substituting them
mainly with wind turbines and solar collectors of 2800 MW and 1400 MW producing capacity,
respectively. (Sfin, 2015: 19) According to the concept, more than 5500 MW of the whole energy
production would be covered by the already existing and newly created renewable-based capacity.
This way, green energy would constitute 27.5% of the total production.(Sfin, 2015: 26) However,
the concept, which was based on software simulation, has left some questions open. Firstly, the
target year is set to 2030, which means that the currently operating blocks of Paks will still be
working, providing 2000 MW energy. The document does not provide any suggestion, how exactly
this capacity will be replaced, when the four old blocks will be shut down between 2032-37.
Another huge shortcoming of the plan is the complete lack of financial calculations, which in my
opinion renders the whole concept rather unrealistic.
Apart from the position of the above-mentioned NGOs, it is also worth taking a look at the
attitudes of political parties towards nuclear energy. One month after signing the contract with
Rosatom and the Russian Federation, the majority of the National Assembly has voted in favour of
accepting the expansion of the Paks NPP. The governing FIDESZ and Christian Democrats and the
representatives of the extremist Jobbik pressed 'Yes', while opposition parties on the left - including
the Socialist Party, its break-away fractions and the two green parties - have voted otherwise. 5
(Greeninfo, 2014) The most vehement rejection of further nuclear capacity is naturally - shown by
the two green-leftist parties6. LMP (Politics Can Be Different) does not only oppose the Paks 2
project because of a high risk of corruption or the unilateral deal of the government with the
Russians, but they also believe that the Hungarian energy sector should entirely be based on
renewable sources in the long run, with the gradual downgrading of fossils and huge government
support spent on enhancing energy efficiency and decentralization. (LMP, 2014: 75-82) A very
similar concept was presented by PM (Dialogue for Hungary), emphasizing the need for
decentralization and the installation of smart grids. In their 2014 election program, they pledged to
stop the artificially forced and non-transparent preparation of the expansion of Paks NPP.
5

Interestingly, several leading government officials, including the Prime Minister, were not present at the time of the
vote. Also, MPs of the Democratic Coalition a new party behind the previous Prime Minister, Ferenc Gyurcsny
-were also absent. Bearing in mind that Mr. Gyurcsny's government was behind the 2009 decision leading to the
possibility of expansion, his absence is a clear indication that he otherwise supports Paks 2.
Because of a difference of opinion regarding election strategy, several MPs have left LMP and founded a new party
(PM) with very similar policy goals.

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(Egytt-PM, 2014)
All in all, we can see that both the cited NGOs and political parties oppose nuclear energy and
wish to substitute it with wind, solar, geothermal or biomass-produced power in the long run.
However, we can't help noticing that none of the mentioned plans include a clear, financially
feasible and data-proof concept of how to avoid the use of nuclear energy in the future completely.
What is more, Mr. Aszdi has pointed out in conference at the Hungarian Academy of Sciences in
February 2014 that substituting the two planned blocks of Paks 2 with wind turbines and solar
power would mean the construction of 6300 MW wind and 5200 MW solar capacity 7, for an
estimated price of 11-26 billion EUR. In addition to this, 11 new pump-fed hydroelectric plants
would be needed to store the extra energy produced by these renewables, costing another 5 billion
EUR. (Aszdi, 2014) Thus, if we consider the overall costs of this system (min. 16 billion EUR)
and compare it with the estimated maximum costs of Paks 2 (10-12 billion EUR), it becomes clear
that Hungary would simply not be able to invest such a huge amount of money into an entirely
renewable-based production, especially without a bank loan with similarly low interest rates that the
Russians have offered.

2. Transparency, corruption and specifics detailed critique of Paks 2

We must not forget that the ongoing debate about Paks 2 is not solely centred on the question of
nuclear energy and its positive/negative impacts. The circumstances of the investment, the
preparations and costs have raised several concerns even from the side of those, who otherwise have
no objection to the expansion. To begin with, another energetic specialist, Jnos sz has pointed out
that choosing the AES-1200 type blocks for Paks2 is a bad decision, because their performance
cannot be adjusted in the long run, as opposed to the Western PWR technologies, which are more
advanced and suit not only the basic-level operation. (sz, 2014: 3) Although his argument is
contradicted by his colleague, Ivn Gcs, both professors agree, that the lack of tender has
detrimental effects, because it further undermines the credibility of the [nuclear] academic field.
(Gcs, 2014: 2)
An emphasized point in relation to transparency is not only the lack of tender, but also the
disputed existence of the impact studies. Energiaklub together with TASZ (a non-profit human
rights watchdog) has initiated a lawsuit against the Ministry of National Development in order to
get the presumed studies, but the case was cancelled on the ground that the Ministry, otherwise
responsible for preparing the expansion of Paks, does not possess the requested information.
(Fazekas et al., 2014: 15) Although the Minister later confirmed the existence of the material and
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As the solar panels and wind turbines work only with 20-30% efficiency as opposed to the 96% in case of nuclear
reactors the amount of installed capacity needs to be immensely bigger to produce the same amount of energy
(Aszdi, 2014) Of course, we might also question why Mr. Aszdi has only included the two least adjustable means
of renewable energy, disregarding biomass, water and all other means.

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that every necessary information, stipulated by law, has already been released, he added that the rest
is a matter of national security and cannot be made public. (Index, 2014b) The level of secrecy was
further increased when the National Assembly has adopted a law in the beginning of March 2015,
which made all data regarding the technical features of construction, the above-mentioned impact
studies, details of the Russian-Hungarian financial pact and the contracts of would-be entrepreneurs
disclosed for the next 30 years 8. It means that the first effective lawsuit for obtaining any of the
aforementioned information will only be possible once the two new blocks will have been operating
for 20 years already. (Index, 2015a) In reaction to the critics, Mr. Aszdi has emphasized that the
technical and financial details of the project need to be protected in order to avoid any possible
attack on the nuclear power plant. He also added that such disclosure is not unprecedented; referring
to the fact that Finland9 can also protect these contents for up to 30 years. (Hirado.hu, 2015)
Another recurring question is corruption. Because the size of the capital investment in case of
Paks 2 is incomparable to any other project in Hungary, the possible danger of corruption is already
high and only gets exacerbated by a poor level of transparency and the recent case of disclosure. In
another document, Energiaklub has analysed the probability of corruption and its expected effects
on the investment. (Fazekas et al., 2014: 44) Based on international statistics they warn that statesponsored constructions of such a big volume usually entail a 5% minimal rate of corruption.
However, since a nuclear power plant has special features compared to ordinary projects, the costs
of corruption can increase up to 10-15%. If we accept the reasoning behind the higher number and
compare it with the general Hungarian environment of corruption risks, the result will be 400-600
billion HUF (1.3-1.9 billion EUR) extra loss, payable entirely by taxpayers money. To indicate the
enormity of this figure, the document brings up the example of the Metro 4 project in Budapest,
whose final costs reached 450 billion HUF and was finished 10 years after the originally planned
deadline. (Fazekas et al., 2014: 33)
Opposition parties have pointed to another aspect of Paks2, which might still influence the
whole outcome of the project: the compliance with the norms and regulations of the European
Union. Currently, there are three questions connected to the investment that might prove to be
problematic from EU perspective: the supply of nuclear material from Russia, the possibility of
hidden state subsidies and the case of public procurements. (Index, 2015b) As for the first issue, the
Euratom Supply Agency (ESA) has indicated in March 2015 that the deal about nuclear supply is
not in accordance with the relevant European norms and pledged to block the project until Hungary
re-negotiates its contract with Russia. The main concern of ESA was that the contract gave Russia
the explicit rights for supplying nuclear material in the first 20 years of operation. After negotiating
8
9

The originally planned time span for disclosure was 15 years, but the relevant parliamentary committee proposed a
period of 30 years, only a few days before the vote.
In Finland, Rosatom is also preparing to build a 1200 MW nuclear power plant with the same VVER-1200
technology as in Paks

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with the European Commission, the Hungarian government reduced this time span to 10 years,
following the Finnish example. As the disputed part was modified, the Commission has authorized
the project entirely. (Index, 2015b) Despite the EUs approval, the objecting NGOs, parties and
specialists are still hopeful for a possible veto, as the second and the third issue is still on the table,
keeping Paks 2 under close scrutiny in the near future as well.

Conclusion
Since the beginning of 2014, the expansion of Paks NPP has been one of the most controversial
issues in Hungarian politics in connection with the countrys economy, dependency and future
energy security. In this paper I tried to give a concise, but wide-ranging summary of the most
relevant arguments of the existing debate, be it either in favour or against nuclear energy generally
and Paks 2 specifically. Having examined various documents, scenarios and proposals from
different organizations and professionals, I came to conclude that within the limits of the Hungarian
economy, with the constant closures of out-of-date power plants and the enormous gap in the
countrys electricity production in the near future, the two proposed nuclear blocks of Paks 2 have
no feasible, affordable and sustainable alternative in Hungary. Based on my readings, I believe that
the capacities of the renewable energy sources in their current technological stage are not developed
enough to offer alone a viable and safe option for the next decades in respect of electricity
production. Although it is anticipated that by the middle of the 21 st century, the prices of producing
and using renewable energy will considerably decrease and together with the necessary
technological inventions the current shortcomings can entirely be eliminated, a countrys energy
demand must until then, by whatever means, be constantly fulfilled. The dilemma is: do we want to
fulfil it by using more coal, lignite, gas or oil, even temporarily - as many green organizations
suggest -, or do we want to invest into a technology which is predictable, safe and doesnt pollute
the air.
I think that the debate about Paks 2 has taken the wrong direction from the beginning, as the
main question should not have been whether Hungary needs further nuclear energy or not, but
rather: what else does it need. The two new blocks with 2400 MW production will give only the
very basis of the domestic electricity supply, but the missing 4-5000 MW still has to be provided by
other means, including a significant share of natural gas and renewable sources. Moreover,
accepting nuclear power as the only currently available option for a country with limited natural
resources and financial capabilities does not mean that the realisation of the project itself and
certain details cannot and should not be criticized. As I have described above, there are several
points in connection with the political dimension of Paks 2 that raises legitimate concerns both on
domestic and EU level. The lack of tender, the abrupt and unexpected deal between Orbn and

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Putin, the very low level of transparency and accountability and the disclosure of all important
aspects of the contracts for 30 years are all factors that influenced the opinion of political parties
and the Hungarian public about the project and nuclear energy in a detrimental way.
In such an uncertain and non-transparent political environment, we cannot be sure whether
Paks 2 will indeed be finished in time for the contracted price, and will produce cheap energy for
the country until the end of its lifespan, or whether it is going to be the biggest source of corruption
and mismanagement in upcoming years, causing deep wounds to the Hungarian economy.
Therefore, I believe that the initial questions of the paper cannot be properly answered based on the
available information. Without a substantial change in political will and openness, Paks 2 will
generate further questions and dilemmas in the next decades and several of them might be left
unanswered.

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