Hungary’s flagship nuclear project, Paks II, stands at a decisive juncture as a new government seeks to reassess its costs, risks, and geopolitical implications. Between energy security needs and dependence on Russia, there is little room for maneuver.
by Zoltán BAROTÁNYI (Magyar Narancs, Hungary)
Nuclear energy has played a key role in Hungary’s energy mix since the phased commissioning of the reactor units of the Paks Nuclear Power Plant between 1983 and 1987. Over the past decade, however, its share in electricity generation has gradually declined.
While in 2014 Paks still accounted for 53.6 percent of domestic generation, by 2025 this had fallen to 45.2 percent, according to data from MAVIR, largely due to the rapid expansion of solar-based electricity production.
Despite this decline, Paks remains central to Hungary’s electricity system. Last year it still accounted for 36.2 percent of gross electricity consumption. The gap between production share and consumption highlights a persistent structural issue: Hungary is not self-sufficient in electricity.
Although the import ratio fell to 20.2 percent by 2025, there were still 331 quarter-hour periods when imports exceeded 50 percent.
This volatility is exacerbated by the lack of adequate energy storage capacity. Hungary has limited access to high-capacity batteries and lacks pumped-storage hydro facilities, making it difficult to balance fluctuations in renewable generation. These constraints reinforce the continued need for stable baseload generation, particularly nuclear power.
At the same time, nuclear energy is not without risks. The Paks plant—operated as part of the state-owned MVM Group—relies on the Danube for cooling water. During extreme heat and drought, rising water temperatures and declining flow levels may pose operational challenges.
Waste management is partly resolved domestically: spent fuel is stored on-site in an interim facility, while low- and intermediate-level radioactive waste is disposed of in the National Radioactive Waste Repository near Bátaapáti.
The four currently operating reactors at Paks, built in the 1970s using Soviet-designed VVER technology, have already undergone lifetime extensions. Even so, these extensions will expire by 2037.
Avoiding a sudden loss of generating capacity will likely require further extensions, which remain significantly cheaper than constructing new nuclear units. No one is more familiar with this situation than the Hungarian taxpayers, who must bear the costs of an extremely expensive and seemingly endless nuclear investment project plagued by massive delays—assuming it can be completed at all.
The alternative—building new capacity—has proven far more complex. The Paks II project, intended to eventually replace existing units, became a concrete plan with the 2014 nuclear cooperation agreement signed by Prime Minister Viktor Orbán and Russian President Vladimir Putin. Shortly thereafter, the Hungarian Parliament, dominated by the supermajority governing party Fidesz, approved the expansion.
Under the agreement, Russia’s state nuclear company Rosatom is to build two Generation III+ VVER (AES-2006) reactors with a capacity of 1200 MW each. The estimated cost of the project is €12 billion, excluding additional infrastructure and waste management expenses.
Financing is heavily reliant on a Russian state loan covering 80 percent of the cost, with Hungary providing the remaining 20 percent.
The project has been controversial from the outset. The contract was awarded to Rosatom without a public procurement procedure, and key project details were classified for 30 years.
Although the European Commission approved the project in 2017, concerns about transparency, cost, and geopolitical exposure have persisted.
These concerns have only intensified as Hungary’s broader energy dependence has remained largely unchanged. A particularly sensitive issue is the country’s reliance on Russian oil and natural gas. In the current geopolitical context—marked by Russia’s war in Ukraine and tensions with the European Union and NATO—this dependence carries significant political risk.
Meanwhile, progress on Paks II has been slow. Construction is significantly delayed, and its completion timeline remains uncertain. Even Viktor Orbán acknowledged after his electoral defeat that the project should have advanced more quickly.
The political context has now shifted dramatically following the two-thirds electoral victory of the Tisza Party. This change has reopened fundamental questions about the future of Paks II.
Incoming prime minister Péter Magyar has so far avoided committing to a single course of action. While he considers nuclear energy necessary for Hungary’s energy mix, he has also described the project as overpriced and pledged to review all contracts before making a decision.
Public attitudes toward nuclear energy have also evolved. While events such as the Fukushima disaster weakened trust in nuclear technology, more recent developments—particularly wars and rising hydrocarbon prices—have reinforced its perceived importance.
Even so, nuclear energy cannot fully replace hydrocarbons, which remain essential not only as energy sources but also as industrial inputs and as fuels for flexible gas-fired power plants.
Critics of Paks II argue that continued investment in the project is no longer justified. Instead, they suggest that Hungary should seek to limit financial losses and redirect resources elsewhere.
Others emphasize that Rosatom has underperformed across legal, financial, and technical dimensions, and that holding the company accountable could itself yield economic benefits.
The new government’s decision will therefore have far-reaching consequences. Continuing the project is made somewhat more likely by the fact that Péter Magyar is not fundamentally opposed to nuclear energy, unlike some previous opposition figures who called for immediate cancellation.
At the same time, institutional constraints limit the government’s flexibility. Strict separation rules require Paks I and Paks II to operate under distinct organizational and governance frameworks.
In addition, political considerations weigh heavily: after years of pro-Russian policy under the Orbán government, further cooperation with Russia may face strong domestic and international resistance.
If the new government opts to terminate the project, it will need to demonstrate that Russian partners failed to meet contractual obligations.
Such a move would not only necessitate the rapid development of alternative energy strategies—likely centered on renewables and expanded storage—but would also raise legal and financial challenges.
Complicating matters further, the global nuclear industry is undergoing transformation. Increasing attention is being directed toward small modular reactors (SMRs), while traditional large-scale projects face growing scrutiny.
Hungary is therefore likely to remain tied to the Paks II question for years to come—whether through continued construction or through the management of disputes and compensation claims if the project is halted.
(source: update-eu.cz)
