Impact of the extension for the Hungarian economy and energy market

The government stated that the Paks 2 project will mean 1% increase per year of the GDP in the construction period (10 billion euro is more or less equal to 10% of the Hungarian GDP, and roughly 20% of the yearly state budget). However, the 1% increase was disputed by economic papers, and concluded that this is valid only for the first year of the investment.

The intergovernmental agreement promises that 40% of the project can be implemented by Hungarian companies, but according to earlier estimates, less than 30% is likely.

Governmental sources said that some 10 thousand jobs (with not determined multiplication effect) will be created during construction time. Nevertheless, a previously prepared analysis (carried out by Paks NPP) calculated that only 7-800 new jobs will be created in the operation phase.

According to our understanding, the plan of the government (costs of the state loan will be paid from the state budget) clearly raises the issue of giving illegal state aid for the Paks 2 project, so it must be investigated by the European Commission. With this financing construction Paks 2 would clearly distort the Hungarian energy market.

With the two 1200 MW new nuclear units (if they start to operate in the 2020 years) there would be 4400 MW nuclear capacity in a country where currently the maximum load is around 6500 MW, and the minimum load is less than 4400 MW (see Fig.).

This situation will not let renewable technologies into the electricity system neither on physical nor on market terms: the renewable technologies in the merit order would push nuclear capacities into the load following range, which is technically impossible for Paks 1, and would further ruin the economy of Paks 2.

Furthermore, the investment, especially if calculated together with the financing need of the additional investments, will drain off the financing opportunities in the energy sector.