Greenpeace: Paks upgrade ‘unviable without state subsidy’
The upgrade of Hungary’s sole nuclear plant in Paks, referred to as Paks II, is unviable without a state subsidy, and as such the project could distort competition on the market, Greenpeace says in its study published today.
According to Greenpeace, state subsidies for the project would likely have an incentivizing effect as the project could not have happened in their absence.
Greenpeace says in the report that Paks II has the “potential to distort competition on the Hungarian market as it would petrify the current situation with the dominant market power of state-controlled generation companies”.
According to Greenpeace, the demand for electricity in Hungary can be met at a lower cost through “electricity imports or other solutions, such as investment into energy efficiency measures or renewable energy”. The study says that the project “will likely have a crowding-out effect on the alternatives to nuclear power generation with lower costs than Paks II”. Citing the example of the recent renewable power auctions in Germany, Greenpeace says that such practices are more competitive given that “private capital can deliver the needed generation capacity in a cost-efficient way”.
Based on a correlation analysis, the study found low correlations between power prices in Hungary and surrounding countries, and this fact could disrupt “the seamless trade between Hungary and neighboring countries”.
Following an analysis of the market concentration in the Hungarian power generation market, Greenpeace says the study shows that the Hungarian state has a “dominant position on the Hungarian power generation market and this dominance will even be increased with the commissioning of Paks II”.
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