Paks II: Strong positive signal for future nuclear investments in Europe

FORATOM, the voice of the European nuclear energy industry, welcomes the decision of the European Commission (EC) to approve Hungary’s financing scheme for the construction of two nuclear reactors at Paks II. The EC’s decision very opportunely recalls that facilitating nuclear investment is one of the objectives of the Euratom Treaty, concluded in Rome 60 years ago, and that state support is therefore compliant with EU rules.

Recently, the European Commission dropped a case against Hungary regarding the compatibility of the Paks II project with EU public procurement legislation. Now the EC approves the financing scheme and clears the way for Hungary to start construction.

“Following the approval by the European Commission of the proposed investment contract for the construction of a new nuclear power station at Hinkley Point C in the UK*, the recent decision on the Paks II project is good news for the whole industry and sends a positive signal for future nuclear investments in Europe” said Jean-Pol Poncelet, FORATOM Director General.

FORATOM had already expressed its views about the State aid case during the Commission’s investigation.

FORATOM recalled the right of Member States to choose nuclear as part of their energy mix and to favour long-term investments for nuclear energy, in line with the objectives of the Euratom Treaty. FORATOM praises the European Commission for referring in its official announcement to Article 2 of the Euratom Treaty which states that the European Union shall “facilitate investment and ensure, particularly by encouraging ventures on the part of undertakings, the establishment of the basic installations necessary for the development of nuclear energy in the Community”.

Nuclear contributes to security of supply. In the case of Hungary, as explained in the Country Factsheet published in November 2015 by the European Commission with the State of the Energy Union report, Hungary’s energy import dependency is higher than the EU28 average. Import dependency for petroleum products is at the EU average, while that of gas is above, although has decreased since 2005. Electricity production by nuclear will help Hungary to significantly reduce dependence upon imported fossil fuels. Also, important to note that Hungary foresees facing a 50% gap in electricity supply in 2030.

With 129 nuclear power plants operating in 14 of the 28 EU Member States usually at high capacity levels – typically between 85 and 90% – nuclear power accounts for 27% of EU’s electricity production and provides nearly half of the EU’s low-carbon electricity. Nuclear is similar in terms of life-cycle greenhouse gas (GHG) emissions to onshore wind. Nuclear power plants provide stable base-load capacity for up to 60 years. Nuclear will be an important contributor to the EUs goal of decarbonising its economy by 80-95% by 2050.

For further information, please see FORATOM’s response to the EC’s invitation to submit comments pursuant to Article 108(2) of the TFEU on Paks II nuclear power plant project.

* In October 2014, The European Commission found revised UK plans for the construction and operation of a new nuclear power plant at Hinkley Point in Somerset to be in line with EU rules.