The European Commission's anti-trust authorities have cleared Hungry for the construction of the Paks II nuclear power plant expansion with some conditions intended to ensure that project does not distort single market dynamics within the countries that share the euro as currency.
In 2015, Hungary contested that the financing of the project did not involve state aid. The commission, however, considered Hungary's low return on its investment to constitute a form of state aid and spelled out “substantial” mitigating conditions that would minimize the market distortion.
Said Margrethe Vestager, who heads the anti-trust commission, “Hungary has decided to invest in the construction of the Paks II nuclear power plant, its right under the EU Treaties. The Commission's role is to ensure that the distortion of competition on the energy market as a result of the state support is limited to a minimum. During our investigation, the Hungarian Government has made substantial commitments, which has allowed the Commission to approve the investment under EU state aid rules.”
The conditions include having Paks II operate separately from the original Paks nuclear power plant with that separation to include any subsequent operators or state-owned energy companies from operating Paks II. In addition, Paks II must sell 30 percent of its output on an open market with the rest sold at open auctions that do not favor any entity over another.
Profits earned by Paks II are also to be regulated. Profits can be used to pay Hungary back for its investment or to cover operating costs at Paks II. Profits cannot be used to infest in construction or purchase of any additional generation capacity, 4-Traders reported.
Construction of Paks II has been delayed due to the regulatory reviews required. The commission's anti-trust investigation began in November 2015, six months after Hungary notified the European Commission of its intentions to invest in the two-reactor WWER 1200 facility.
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