What Happened to Paks Nuclear Power Plant (Hungary)?

The Paks Nuclear Power Plant, located 100 km southwest of Budapest on the Danube River, has been the cornerstone of Hungary's energy supply for decades. Its four Soviet-designed VVER-440 reactors, commissioned between 1982 and 1987, provide around 50% of the country's electricity. The plant has undergone upgrades, increasing its total capacity to 2000 MW, and its operational licenses have been extended until the 2030s, with plans to explore extensions to 70 years.

The long-planned Paks II expansion project aims to add two new VVER-1200 reactors, each with a capacity of 1200 MW, to significantly boost Hungary's energy independence. The project was initiated by a controversial intergovernmental agreement signed in 2014 between Hungary and Russia, with Russia's state nuclear corporation Rosatom as the main contractor and a €10 billion Russian state loan covering 80% of the initial €12.5 billion cost. This direct award without an open tender drew criticism regarding its economic justification and political motivations.

The Paks II project has faced numerous delays, accumulating approximately a decade-long setback from its original 2026 operational target. These delays stemmed from EU regulatory procedures, differences in nuclear licensing processes, project management shortcomings, and geopolitical factors, particularly the Russia-Ukraine war. In September 2025, the European Court of Justice annulled the European Commission's 2017 approval of state aid for the project, citing a failure to properly investigate compliance with public procurement rules. Despite this, the project formally entered the 'under construction' phase on February 5, 2026, with the pouring of the 'first concrete' for Unit 5, a milestone recognized by the International Atomic Energy Agency. Earthworks for Unit 6 are also proceeding.

However, the future of Paks II remains highly uncertain. Following Hungary's parliamentary election in May 2026, the new government led by Prime Minister Péter Magyar announced a comprehensive review of the project's contracts, financing, and implementation conditions. Unofficial estimates now suggest the total investment cost could reach as high as €25 billion, significantly exceeding the original budget. The project is also described as being in a 'sanctions meat grinder' due to geopolitical pressures and the loss of key suppliers like Siemens for instrumentation and control systems, despite the US and EU issuing general licenses and derogations for certain transactions related to the project.

As of July 31, 2026, the operational Paks I plant is facing an immediate crisis. Record-low water levels in the Danube River, exacerbated by a prolonged drought in Central Europe, have forced the plant to operate at less than half its normal capacity (965 MW instead of 2000 MW). Prime Minister Magyar announced that the entire Paks I plant is expected to be powered down completely by early August, marking the first full shutdown in its 44-year history. This unprecedented situation highlights the vulnerability of the existing plant to climate change impacts and underscores Hungary's urgent need for stable energy sources, even as the Paks II project faces an uncertain path forward.