INHALT

Commission Decision (EU) 2017/2112 of 6 March 2017 on the measure/aid scheme/State aid SA.38454 — 2015/C (ex 2015/N) which Hungary is planning to implement for supporting the development of two new nuclear reactors at Paks II nuclear power station (notified under document C(2017) 1486) (Only the English version is authentic)Text with EEA relevance.

COMMISSION DECISION (EU) 2017/2112
of 6 March 2017
on the measure/aid scheme/State aid SA.38454 — 2015/C (ex 2015/N) which Hungary is planning to implement for supporting the development of two new nuclear reactors at Paks II nuclear power station
(notified under document C(2017) 1486)
(Only the English version is authentic)
(Text with EEA relevance)
1.
PROCEDURE
2.
DETAILED DESCRIPTION OF THE MEASURE
2.1.
DESCRIPTION OF THE PROJECT
2.2.
OBJECTIVE OF THE MEASURE
Table 1
Expected phase-outs of domestic installed capacities by 2031
2.3.
DESCRIPTION OF THE NEW UNITS — THE TECHNOLOGY TO BE DEPLOYED
2.4.
THE BENEFICIARY
2.5.
FINANCING STRUCTURE OF THE PROJECT AND RIGHTS AND OBLIGATIONS UNDER THE EPC CONTRACT
2.5.1. FINANCING INTERGOVERNMENTAL AGREEMENT (THE ‘FINANCING IGA’)
2.5.2. THE EPC CONTRACT
2.5.3. RELATIONSHIP BETWEEN THE STATE AND THE BENEFICIARY
2.6.
THE HUNGARIAN ELECTRICITY MARKET
2.6.1. DESCRIPTION OF THE HUNGARIAN ELECTRICITY MARKET
Figure 1
Composition of total electricity consumption in Hungary in 2015
Figure 2
Gross domestic electricity production in Hungary in 2015
Figure 3
Monthly average day-ahead baseload prices in the CEE region (including Hungary) and Germany (2010-2016)
Figure 4
Regional base-load futures prices for January-June 2017
Figure 5
Electricity exchange between Hungary and neighbouring countries
2.6.2. DESCRIPTION OF THE ENVISAGED EVOLUTION OF THE HUNGARIAN ELECTRICITY MARKET
Figure 6
Additional capacity requirement in the Hungarian electricity sector
Table 2
New capacities to be built in the Hungarian electricity sector
2.7.
GROUNDS FOR INITIATING THE PROCEDURE
3.
THE POSITION OF THE HUNGARIAN GOVERNMENT
3.1.
HUNGARY’S POSITION ON THE EXISTENCE OF AID
3.1.1. ECONOMIC ADVANTAGE
3.1.1.1.
Hungary’s position on the WACC
3.1.1.2.
Hungary’s position on the IRR
(A) Electricity price forecasts
(B) Operational assumptions
(C) The IRR of the project
3.1.1.3.
Hungary’s position on the LCOE
(A) The Economic Study
(B) Further clarifications
3.2.
HUNGARY’S POSITION ON THE POSSIBLE COMPATIBILITY OF THE MEASURE WITH THE INTERNAL MARKET
3.2.1. POSITION ON THE OBJECTIVE OF COMMON INTEREST
3.2.2. POSITION ON THE NECESSITY OF THE MEASURE
3.2.3. POSITION ON THE PROPORTIONALITY OF THE MEASURE
3.2.4. POSITION ON THE EFFECT OF THE MEASURE ON THE INTERNAL MARKET
Table 4
ENTSO-E Projections of Installed Interconnection Capacities for Import in Hungary
Table 5
ENTSO-E Projections of Installed Interconnection Capacities for Export in Hungary
Figure 7
Projected output per technology and national demand until 2040 (factual scenario)
Figure 8
Projected output per technology and national demand until 2040 (counterfactual scenario)
Figure 9
Difference in Hungarian Base load Prices between base case and the counterfactual
Figure 10
Combined market shares of MVM Group and Paks II by production (MWh) on the markets of Hungary + Slovakia + Romania
Figure 11
Price setting fuel in the Hungarian power market
3.3.
FURTHER COMMENTS PUT FORWARD BY HUNGARY IN RESPONSE TO THE OPENING DECISION
4.
COMMENTS FROM INTERESTED PARTIES
4.1.
COMMENTS ON THE EXISTENCE OF AID
Figure 12
Long-run electricity price forecast curves (EUR/MWh)
Figure 13
Long-run electricity price forecast curves (EUR/MWh)
4.2.
COMMENTS ON THE POSSIBLE COMPATIBILITY OF THE MEASURE WITH THE INTERNAL MARKET
4.2.1. COMMENTS AS REGARDS THE OBJECTIVE OF COMMON INTEREST
4.2.2. COMMENTS AS REGARDS THE APPROPRIATENESS OF THE MEASURE
4.2.3. COMMENTS AS REGARDS THE NECESSITY OF THE MEASURE AND THE INCENTIVE EFFECT
4.2.4. COMMENTS AS REGARDS THE PROPORTIONALITY OF THE MEASURE
4.2.5. COMMENTS AS REGARDS THE EFFECT OF THE MEASURE ON THE INTERNAL MARKET
4.3.
ADDITIONAL COMMENTS RAISED BY INTERESTED PARTIES
4.4.
RESPONSE OF HUNGARY TO THE COMMENTS RAISED BY INTERESTED PARTIES
4.5.
ADDITIONAL COMMENTS RAISED BY HUNGARY IN ITS RESPONSE TO THE OBSERVATIONS FILED WITH THE COMMISSION
5.
ASSESSMENT OF THE MEASURE
5.1.
EXISTENCE OF AID
5.1.1. ECONOMIC ADVANTAGE
5.1.1.1.
Commission’s assessment of the WACC
5.1.1.2.
The Commission’s assessment on the IRR of the project
Figure 14
Long-run electricity price forecast curves (EUR/MWh)(88)
Figure 15
Long-run electricity price forecast curves (EUR/MWh)(94)
Figure 16
Long-run electricity price forecast curves (EUR/MWh)
Figure 17
IRR values for December 2014
Figure 18
IRR values for February 2017
5.1.1.3.
The Commission’s assessment of the LCOE.
5.1.1.4.
Conclusions on the economic advantage
5.1.2. TRANSFER OF STATE RESOURCES AND IMPUTABILITY
5.1.3. SELECTIVITY
5.1.4. EFFECT ON TRADE AND DISTORTION OF COMPETITION
5.1.5. CONCLUSION ON THE EXISTENCE OF STATE AID
5.2.
LEGALITY OF THE AID
5.3.
COMPATIBILITY
5.3.1. LEGAL BASIS FOR ASSESSMENT
5.3.2. COMPLIANCE WITH UNION LAW OTHER THAN STATE AID RULES
5.3.3. OBJECTIVE OF COMMON INTEREST
5.3.4. NECESSITY OF THE AID AND MARKET FAILURE
5.3.5. APPROPRIATE INSTRUMENT
5.3.6. INCENTIVE EFFECT
5.3.7. PROPORTIONALITY
5.3.8. POTENTIAL DISTORTIONS OF COMPETITION AND EFFECT ON TRADE AND OVERALL BALANCING
5.3.8.1.
Increase of possible market concentration
5.3.8.2.
Barrier to entry for new market players
(a)
The measure’s potential effects in the Hungarian market
(b)
The measure’s potential cross-border effects
(c)
The potential effects of the parallel operation of Paks NPP and Paks II
5.3.8.3.
Wholesale market liquidity risk
5.3.8.4.
Conclusion on competition distortions and overall balancing
6.
CONCLUSION
Article 1
Article 2
Article 3
Article 4