#StateAid: Commission clears investment in construction of Paks II nuclear power plant in Hungary

paksII600The European Commission has concluded that Hungary’s financial support for the construction of two new nuclear reactors in Paks (Paks II) involves state aid. It has approved this support under EU state aid rules on the basis of commitments made by Hungary to limit distortions of competition.

Margrethe Vestager, commissioner in charge of competition, said: “Hungary has decided to invest in the construction of the Paks II nuclear power plant, its right under the EU Treaties. The Commission’s role is to ensure that the distortion of competition on the energy market as a result of the state support is limited to a minimum. During our investigation the Hungarian government has made substantial commitments, which has allowed the Commission to approve the investment under EU state aid rules.”

The Commission’s state aid investigation found that the Hungarian state will accept a lower return on its investment than a private investor would do. The investment therefore involves state aid within the meaning of EU rules. These rules require state aid to be limited and proportionate to the objectives pursued in order to be approved. Hungary has demonstrated that the measure avoids undue distortions of the Hungarian energy market. In particular, it has made a number of substantial commitments to limit potential distortions of competition.

Commenting on the decision, Hungarian MEP and Greens/EFA transparency spokesperson Benedek Jávor said: “Despite the Hungarian government’s repeated denials, the European Commission has confirmed that the Paks II project will benefit from State Aid. By doing so, the Commission effectively concedes the underlying economic weakness of the project. We remain of the view that Hungary has not demonstrated that this project will avoid undue distortions of the Hungarian and regional energy markets and we will be strongly supportive of any appeal, as is apparently being considered by the Austrian government.

“With the Hungarian state to be the owner, financer, operator and regulator of the new nuclear power plant, there is a clear problem of concentration of power. Competition and public procurement rules must be applied evenly across the entire energy market, and the nuclear industry must be no exception.”

ROSATOM the Russian Federation national nuclear corporation welcomed the decision. Kirill Komarov, first deputy CEO of Rosatom, said: “Construction of two new units at Paks NPP is an important project of Hungarian-Russian bilateral cooperation and we are glad to proceed to the active stage of its implementation. Advanced Russian Gen 3+ units  will be built in Hungary in compliance with post-Fukushima safety requirements and IAEA recommendations. Along with reliable green and affordable  energy, the project will also boost national economy development, create new jobs, provide orders for the local industry.”

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Category: A Frontpage, Business, Competition, Energy, EU, Hungary, Nuclear energy, State aid

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