Hungarian MEP: Nuclear energy’s ‘hidden subsidies’ must end

Benedek Jávor [European Parliament]

Atomic energy is not competitive in the energy sector and must not be artificially preserved at the expense of renewable alternatives, Benedek Jávor, Green MEP and member of Nuclear Transparency Watch, told EURACTIV Slovakia.

Benedek Jávor is a Hungarian MEP with the Greens/EFA group, representing the Together and Dialogue for Hungary parties at a national level.

Jávor spoke to EURACTIV.sk’s Pavol Szalai at the European Nuclear Energy Forum (ENEF) in Bratislava.

Speakers at the ENEF refer to a “new format” consisting of more debate and civil society presence. Do you feel like there has been a real debate about nuclear energy at the forum?

ENEF is meant to generate discussion. And I believe we need a fair and open discussion on the important issue of nuclear energy. To achieve that goal, we need a balanced discussion, which is not the case here.

It’s completely unbalanced. The room is full of nuclear lobbyists and industry representatives. The one and only NGO is represented by me. I’m in the lion’s den.

Still, I believe we have to start somewhere. This is an experiment. We will see if it is possible to initiate a debate on nuclear energy between the industry and lobbyists on one hand and civil society and non-pro-nuclear decision makers on the other.

I hope in the long run the ENEF can be transformed into a more diverse and colourful discussion.

Why is the nuclear industry opening up to debate now?

They feel a huge amount of pressure from society. First, because of Fukushima, which completely transformed the public’s acceptance and understanding of nuclear energy. Second, because of the revolution in the renewable energy sector. Their prices have been falling for years and now they are competitive on the market.

For decades, nuclear energy lived in protection, under an umbrella, with very good relationships with governments. They thought they could survive in this golden cage. They eventually realised it’s not the case anymore.

The third reason is that nuclear energy has to face the fact it is not competitive on the market. It was clearly stated by the nuclear industry and lobbyists here that energy prices themselves are not able to attract investments themselves and they need public money. And this raises a lot of concerns, creates a lot of conflicts.

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You go as far as to say nuclear energy is privileged compared to other energy sources. Why do you think so? They say renewables enjoy huge public support.

No. First, nuclear energy has had for decades a lot of hidden subsidies. In most cases, they never paid the real cost of nuclear waste. Decommissioning costs are highly underestimated and so on. Each country, which has nuclear energy, subsidises it via the state’s budget in one way or another.

Second, the cases for renewables and nuclear energy are completely different. Subsidies for renewables have been ensured, because decision makers thought they are a non-mature technology. They needed help initially to be on the market and become competitive. Then we can phase out the subsidies.

Seemingly, this policy has functioned quite well. Renewables have reached the level of market competitiveness. And there is huge pressure to phase out subsidies for renewables. With nuclear it is completely different. It is a mature technology, which we have used for more than 60 years.

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Right now, they are claiming more subsidies, which suggests that during these six decades they were not able to become competitive on the market. I have the impression that if we want to maintain this sector, which does not give us the hope that renewables do, it will need public funds for the next 50, 60, 100 years. That is what the nuclear industry lobbies for. When they realised they are not competitive, they started speaking very loudly about climate change. The same people were not interested in it for years.

Most renewables, not all of them, have an even better carbon footprint than nuclear energy. It has a lower carbon footprint than fossil fuels, but renewables are even better. When we reach the point when renewables become better in mitigation, reducing emissions, there is no reason to give nuclear energy special status.

Finally, if we include, and here I agree with Foratom  [the nuclear lobby in Brussels], all the externalities including CO2 prices and let the market work, decarbonisation can be achieved with renewables and energy efficiency with a much better cost efficiency than with nuclear.

The European Commission will decide soon on state aid for new reactors at the Páks nuclear power plant in Hungary. Is the project sustainable in the long term?

In Hungarian, we would call the Páks case a real “veterinarian’s horse”. It shows all the symptoms of how a project can be misinterpreted and done in the wrong way.

First of all, I even question whether Hungary needs the two new blocks. With intensive energy efficiency investments, we could decrease the energy consumption of the country for a much lower price than the €12 billion investment into new blocks at Páks.

The decreased energy need can be satisfied with renewable sources. Last year, the Green Group in the European Parliament and I commissioned a very detailed analysis from the Wuppertal Institute in Germany, from one of the best energy policy analysts in Europe. They modelled their option for a renewable and efficiency-based Hungarian energy system. They proved it would be possible and cheaper than the Páks investment. This was the first analysis of this kind, because the Hungarian government never really studied if there is a need or if there are other options.

So, why did Hungary decide to build the new blocks?

I will come back to this question, because it is the most complicated question and I am not sure I know the exact answer. But there are some other problems. It violates European law in several points including the state aid and public procurement regulations.

The Commission will decide.

The Commission might reach a deal with the Hungarian government in the next couple of weeks. But this is not the end of the story. The deal, as far as we know, is based on very weak legal basis and is based mainly on lies.

There will be a lot of legal debate. Even if there is an agreement between the Commission and the government, there will be court cases on state aid and tendering.

Why is the Hungarian government lying?

Partly, because the Hungarian energy policymakers are a bit old-fashioned and they still live in the 1990s. They understand the energy markets of the 1990s and have not realised what has happened over the last ten years.

Secondly, because our energy efficiency and renewable-based energy system requires very intensive regional and European cooperation. We need a single energy market and intensive cooperation with neighbouring countries, including Slovakia.

There is an interconnection between Hungary and Slovakia.

There are physical and market interconnections, but the grid regulation, for example, is still in the hands of the national authorities. Member states insist on keeping it, which is really not efficient in the case of such small markets as Slovakia, Slovenia or Hungary.

In whose hands should grid regulation be?

I believe there is a need for regional cooperation. The different energy sources in the different member states, mainly renewables, can be regulated in a much more efficient way at a regional level.

Are you talking about strengthening the European Agency for Cooperation of Energy Regulators (ACER)?

Yes. At this point, ACER is not able to do that. But I believe there is a solid legal basis to set up a regional regulatory platform, where member states will cooperate. The highly interconnected regional electricity systems from Prague to Constanța in Romania can be regulated in a more efficient way.

What we see nowadays, the Hungarian government loosening links gradually with European partners and strengthening relations with Russia and some other Eastern partners, is a step down the wrong path.

If it is not willing to participate in this strong regional and European cooperation for a single European energy market, then it has to do something else. And in a small market like the Hungarian one, it’s not easy. Perhaps they think, as they very keen on nuclear energy and old-fashioned energy systems, this is the right solution to make Hungary an energy independent island in the middle of Europe.

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Thanks to Russian technology and loans?

I’m asking myself that question. As it liberates Hungary in a way from its European partners, but instead creates dependence on Russia. The new blocks are funded by Russian money, which creates a 30-year financial tie to Moscow. There is also dependence on Russian technology.

And of course, thirdly, (in relation to building new blocks at Páks) there is the corruption issue. It is not easy to steal money from small-scale, local-investment solar panels on household rooftops or from windmills erected by local governments in villages. But from a huge investment of €12 billion, which is in the hands of the government…

In Hungary, the estimated corruption rate is 15-20%. Even if you take just the lower estimate, it means that almost €2 billion is lost to corruption. Which makes some people very interested in the project.

How do you see the future of nuclear energy? Should there be a progressive phase-out or should the technology evolve and become cheaper and safer?

From an environmental and safety perspective, we should phase out nuclear energy. But of course, this is a political decision. Germany took it. Other states are not ready to do it based on these concerns, as they do not share them. It is quite sad and irresponsible, but it is the fact of the matter.

If the Commission and member states do not create a completely artificial framework for nuclear energy, it will be forced out of the energy system, because it will be simply too expensive compared to other energy sources. It will not be able to compete. So I am trying to prevent the setup of such a beneficial legal and financial environment for nuclear energy.

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Are you talking about the new market design initiative expected from the Commission?

Of course, we will see what the new market design will look like. But what I see now is that even the existing market rules would kill nuclear energy, if they are applied. They did not create new specific legislation for nuclear energy, but they refer to Euratom to exempt nuclear energy from the existing internal market rules including competition and public procurement.

This is extremely dangerous, because in the long run it undermines the competitiveness of Europe’s economy. This is an example that anyone can cite: Nuclear is out of the internal market rules; why do you not give us the same treatment?

As vice-chair of the Parliament’s Environment Committee, which way do you want the new market design to go?

I told the Commission’s vice-president in charge of the Energy Union, Maroš Šefčovič, several times that I expect clear, predictable electricity market rules without exemptions from the new market design. That is what consumers need, that is what the energy sector, including renewable, fossil and nuclear energy, needs. Investments in energy are long-term, so you need stability and predictability. Because that is really lacking now.

The second issue is more sensitive. Everybody and the prime ministers [of Slovakia and the Czech Republic who spoke at the forum] refer to the freedom of member states to determine their energy mix. It is true. But they use the term in the wrong way. Because this freedom cannot mean they can exempt some energy sources from the same internal market rules.

If yes, we have to say good-bye to the internal market. Whatever your energy mix, it must fulfill the requirements of the internal market. The Commission is the guardian of the treaties and its role is to keep member states in line with the treaties.