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Hungarian president signs law on Paks NPP expansion

February 10, 2014, 23:54 UTC+3 BUDAPEST
1 pages in this article

BUDAPEST, February 10, /ITAR-TASS/. The president of Hungary on Monday, February 10, signed a law allowing for the expansion of the Paks nuclear power plant, MTI news agency reported, citing a statement by President Janos Ader.

The head of state said he had considered the possibility of holding a referendum on the expansion of the power plant, but said that the constitution did not allow such plebiscites on obligations that arose out of the country’s international agreements. Several political parties had earlier called for organising such a referendum.

Earlier, the Hungarian parliament approved the law by a 256-29 vote with two abstentions.

Russia may issue a 9-10 billion euro loan to Hungary to build two units at its Paks nuclear power plant.

“No decision on the loan has been made yet. Negotiations are under way to discuss its terms. We hope to reach the final decision in the first half of 2014,” Finance Minister Anton Siluanov said.

The loan may be provided for a period of 21 years with a 10-year drawdown timeline.

Siluanov noted that Russia had long been engaged in loan negotiations with Hungary and admitted that the Russian budget had no 10 billion euros for that purpose at the moment. He said the loan might run “up to 10 billion euros. According to the Rosatom state corporation, it’s slightly over nine [billion euros].”

However “this can be done because some of the funds reserved for lending are not taken during the year and we can simply redistribute them starting from 2014,” Siluanov said.

He believes that “the loan will benefit us as it will keep our enterprises working and will subsequently bring nuclear power plant servicing contracts.”

The agreement on cooperation in the field of peaceful use of nuclear energy was signed in Moscow on Tuesday, January 15, after talks between President Vladimir Putin, Rosatom Head Sergei Kiriyenko and Hungarian Minister for National Development Zsuzsa Nemeth.

“The commissioning of two new units will increase Hungary’s energy independence and improve security,” Putin said. “This is a unique agreement because more than 40 percent of all work is to be done in Hungary.”

Nemeth said earlier that her country would increase the share of nuclear energy in power generation from 40 percent now to 60 percent in 2030.

The government is considering building new reactors at the Paks nuclear power plant to this end a priority.

The state-controlled energy company MVM will create a design company for investing in the project and will be it sole owner.

According to Nemeth, the new power units at the Paks NPP may be commissioned in 2025-2030.

“The Hungarian minister’s statement on plans to increase the share of nuclear energy in power generation is quite logical,” Sergei Kondratyev, head of a sector at the energy department of the Institute of Energy and Finance, said.

He recalled that Budapest had proclaimed priority development of the atomic power industry back in 1980s when the country was faced with a choice between nuclear energy and increased energy imports amidst falling energy production, primarily in the coal industry.

“And although the atomic power development programme was suspended ion the 1990s, the Paks NPP, which accounts for about 40 percent of all electricity production in the country, helped curb the growth of electricity prices in the 2000s,” he said.

According to Kondratyev, “Now that the country is in financial dire straits and the government is facing the task of making the national economy more competitive, atomic power appears to be the best solution."

“On the one hand, this will provide for a relatively low cost of electricity for end users. On the other hand, this will allow Hungary to meet the European Union’s demand to reduce greenhouse gas emissions and improve the environmental situation,” he said.

“The choice in favour of atomic power is logical because there was only one serious incident at the Paks NPP during 29 years of its operation but it did not lead to environmental contamination outside the power plant's grounds. The construction of a third unit at the nuclear power plant will help increase the share of atomic power generation to 60 percent and curb the growth of electricity prices,” Kondratyev said.

He doubts that Hungary’s plans might have been affected by the Fukushima accident in Japan in 2011. “It’s not only that such situation [earthquake and tsunami] could not have occurred in Hungary in principle. New facilities to be built at the Paks NPP will be of the latest generation three+ and have safety levels incomparable to those at Fukushima,” the expert said.

Denis Demin, head of the analytical department of the investment company BFA, also said that “Hungary has energy resources that can meet less than half of domestic demand for energy and for that reason it is very sensitive to energy prices, primary gas prices.”

During the “gas war” between Gazprom and Ukraine in late 2008 and early 2009, Hungary happened to be one of the countries that were affected the most by the halt in the transit of Russian natural gas to Europe.

Demin noted that "finishing the construction at the existing Paks NPP will cost much less than building a new nuclear power plant and therefore can bring substantial financial gains".

In the 20th century, the Paks nuclear power plant was the biggest industrial innovation in Hungary. After completing the capacity upgrade of all units the nominal power of the NPP has reached 2,000 MW. With this, Paks NPP has a leading role in Hungary's power industry. In 2011, its four units produced 15,685 GWh electric energy.

The sell-out price of generated electricity was only 11.66 HUF/kWh in 2011, which is the cheapest value in Hungary. Nuclear power plants are the more environmental-friend solution for energy production. They do not emit carbon-dioxide and can spare as much oxygen as 2 million people breathe in during one year.

The Paks nuclear power plant, located 5 kilometres from Paks in central Hungary, is the first and only operating nuclear power station in Hungary.

The original 30-year lifetime of the four units will begin to run out in 2012. As Hungary lacks energy resources and relies heavily on the power plant, it has committed itself to a 20-year lifetime extension.

Following the Fukushima-1 nuclear accident in March 2011, the Hungarian government said it would conduct a stress test on the Paks nuclear power plant to assess its safety, but it would not abandon plans for lifetime extension and it would also go ahead with plans for its expansion.

In 2005-2008, Russia’s Atomstroyexport completed a contract for the design works and supply of 24 high pressure heaters (HPH) for four power units of the Paks NPP. The new HPH for replacement were delivered to Paks NPP according to the time schedule of planned preventive repairs.

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