Hungary has put the planned Paks II nuclear expansion under review, with a decision expected by the end of 2026 on whether the project remains necessary. The assessment is linked to changes in the power system as solar capacity expands, with more than 8 GW of solar reshaping generation patterns. Energy Minister István Kapitány said the government expects to complete the review before year-end.
The review is taking place while Hungary also considers extending the operating life of the existing Paks I reactors by another 20 years from 2032. The government’s assessment therefore intersects with both new-build plans and the timeline for existing nuclear output. Kapitány said the review is expected to be finished before year-end.
Solar-driven price swings and baseload economics
The market question raised by the review centers on how long low-carbon generation may be available compared with earlier assumptions. Solar capacity is already producing very large daytime surpluses, while wholesale prices during sunny periods can collapse or turn negative. After sunset, the market tightens sharply.
This pattern shifts system needs toward flexibility rather than annual energy volume. Under such conditions, adding additional inflexible baseload generation could face weaker economics unless electricity demand, storage and exports increase quickly enough to absorb surplus generation. The planned role of Paks II has been to replace ageing nuclear units and preserve Hungary’s domestic baseload position.
Storage gaps and implications for nuclear operation
The electricity system that would receive Paks II is described as different from the one in which the project was originally conceived. Solar now dominates new capacity additions, and Hungary has acknowledged that storage deployment remains insufficient relative to solar growth. That constraint is part of what makes the nuclear review relevant to near-term market conditions.
Large reactors can provide stable output but have limited ability to respond economically to extreme intraday price swings. Batteries, pumped storage and flexible generation address a different requirement by shifting electricity between low- and high-price hours. If Paks I operates longer while storage expands, Hungary may have more time to reassess how much additional baseload capacity the system actually needs.
Regional trade effects across Southeast Europe
The outcome of Hungary’s year-end decision is expected to have regional consequences for electricity flows. Hungary is described as one of Southeast Europe’s most important electricity importers and trading hubs, meaning changes in domestic generation can affect cross-border trade. A large new nuclear fleet could reduce long-term imports and potentially increase exports toward Serbia, Romania, Croatia, Slovenia and Slovakia.
A delay or redesign of Paks II would instead preserve greater regional import demand. The review therefore matters for neighbouring generators as well as for Hungary itself, because Serbian hydro and wind, Romanian nuclear and renewables, Croatian hydro and regional gas-fired generation all compete indirectly for the Hungarian market. The year-end decision will not resolve every question around Paks II.
The government’s assessment indicates that Hungary’s generation strategy is no longer shaped solely by replacing old nuclear reactors. More than 8 GW of solar growth, longer Paks I operation considerations, and a growing need for storage are forcing a reassessment of what type of capacity the system will value over the next two decades.
