Hungary Lifts Paks Power Curbs But Premier Warns Full Shutdown Still Possible
Hungary removed output restrictions at the 2 GW Paks nuclear plant on Friday but left open the prospect of a complete shutdown if Danube levels fail to recover.
Hungarian Prime Minister Péter Magyar announced on Friday (2026-08-07) that power demand restrictions linked to the Paks nuclear plant have been lifted, but warned that a complete facility shutdown cannot be ruled out if rainfall fails to raise Danube water levels in coming weeks.6
Lifting restrictions eases immediate pressure on Hungarian consumers and industry. Leaving open the prospect of a total Paks shutdown keeps a significant supply-side risk live for Central European power markets. Paks supplies roughly half of Hungary's domestic electricity generation, meaning full closure would represent a far larger disruption than any partial curtailment seen since late June.3,6
The drought-driven squeeze had been building since late June. Hungarian day-ahead power prices climbed to a six-month high of EUR 222.73/MWh on Sunday (2026-06-28) after 563 MW of Paks capacity was cut due to high Danube water temperatures triggering cooling restrictions, according to Montel data.1 That surpassed the previous six-month peak of EUR 200.72/MWh set on Tuesday (2026-06-23).1
Hungary navigated the first wave of restrictions through a combination of increased gas-fired generation, ramped-up imports, and consumer demand reductions, a Montel EnAppSys analyst said. Each element carries a cost. Gas dispatch lifts fuel bills. Import reliance exposes Hungary to neighbours' own constraints during a summer when heat stress is simultaneously pressuring generation across the continent.3
Oilprice.com reported on Thursday (2026-08-06) that European electricity prices had spiked to EUR 500/MWh in some markets as continental drought conditions hit river-cooled nuclear output across multiple countries while air-conditioning load surged.5
That context tightens the buffer for Hungary. If Paks output is curtailed further, cross-border imports cannot be assumed to arrive cheaply or in volume: the same drought conditions suppressing the Danube affect cooling-dependent plants elsewhere in Europe. ICE Endex TTF front-month gas stood at EUR 55.74/MWh at 0815 UTC on Friday (2026-08-07), flat on the day, suggesting wholesale gas markets are not yet pricing a fresh wave of power-sector gas demand from Hungarian backup generation.5,3
Paks entered summer with a known vulnerability. Its two gigawatts of capacity rely on Danube water for cooling, and river temperatures track air temperatures — making output reductions a recurring drought-season hazard. The warning on Wednesday (2026-08-05) that a complete shutdown was possible if river levels did not recover was the starkest signal yet that operators were considering the situation potentially unmanageable through partial measures alone.4
Hungary's new government under Premier Magyar — whose Tisza party secured a two-thirds supermajority in the April (2026-04-12) parliamentary election, ending Viktor Orbán's 16 years in power — now owns the energy security problem, according to War on the Rocks reporting on the political transition.2 The incoming administration inherited a grid structurally reliant on a single large nuclear site with no near-term replacement capacity. Its options this summer are confined to demand management, gas dispatch, and import procurement.3
Industrial consumers can reduce output once or twice before the economic cost becomes prohibitive. If the drought persists and the Danube stays low, Budapest faces a choice between pushing harder on demand suppression or absorbing the sustained cost of gas-fired backup. Neither is straightforward heading deeper into summer.3
German power front-month was trading at EUR 131.16/MWh at 0815 UTC on Friday (2026-08-07), well below the EUR 500/MWh peak levels reported for the most stressed European markets on Thursday (2026-08-06), suggesting the broader market is treating those extreme prints as short-duration events rather than signalling a persistent shortage.5,6 The gap between those two figures narrows considerably if Danube temperatures do not ease and Paks operators conclude that partial restrictions are no longer sufficient to protect the plant.4