Hungary May Cut Factories From Grid

Hungary's energy crisis arrived late on Friday evening, not with a blackout, but with a government decree. Emergency decree 118/2026 gives MAVIR, the national grid operator, the power to disconnect large industrial users from the electricity network if they do not cut demand when ordered to do so (444, HVG).

The immediate cause is the Danube. Water levels have fallen so low that Paks, Hungary's only nuclear power station, has lost more than half its normal output. Prime Minister Péter Magyar said households are at the end of the restriction chain. The factories go first.

How a dry river shuts a power plant

Paks does not use the Danube as fuel. It uses it as a cooling system. Water is pumped from the river through the plant's cooling circuits to carry away waste heat, then returned to the Danube.

When the river falls too far, the physics and the regulations start to bite. The returned water can become too warm to meet environmental limits, while the cooling-pump intakes risk sitting above the sinking waterline (Die Presse, MVM).

Over the past week, MVM, the state company that runs Paks, has reduced production unit by unit as the river has dropped. By 1 August, output was down to roughly 940 MW, compared with the usual 2,000 MW. The Danube stood at -124 cm and was still falling (VG).

MVM says -134 cm would force a full shutdown. Forecasts point towards -144 cm.

Factories absorb the blow

The decree gives MAVIR a three-step process. It can first ask large users drawing more than 0.5 MW to reduce consumption voluntarily. If that is not enough, it can issue mandatory reduction orders. If a company still does not comply after two hours' warning, it can be disconnected (HVG).

The likely targets are battery plants, cement works, chemical factories and car manufacturers (24.hu). The choice is political as much as technical: industry takes the interruption so homes keep the lights on.

Companies that ignore a cut order face penalties of 200% of the spot price on HUPX, Hungary's power exchange, where electricity is traded hour by hour (444). They cannot claim compensation for lost production. In practice, that means stopped shifts, idle production lines and losses carried entirely by the factory.

Hungary has pulled together some cover: roughly 240 MW of voluntary load cuts from industrial users, plus about 400 MW from repairs at the Dunamenti gas-fired plant (Intellinews). Interconnectors to neighbouring countries can bring in roughly 3,600–3,800 MW of imports (Aktuality).

But imported power during a heatwave is not spare change on the counter. Every neighbour is under pressure too, and the price rises accordingly.

The whole Danube corridor is running short

Europe's electricity markets are tied together. When Hungary goes looking for more imported power, it is bidding against neighbours for the same supply. That pushes prices up across Central Europe.

On 29 July, next-day electricity prices were bunched closely together: €132/MWh in Hungary, €133/MWh in Romania and €139/MWh in Croatia. Hungary's hourly price, though, told the real story. It moved from €12/MWh at midday, when solar production was at its strongest, to €268/MWh in the evening (Serbia Energy).

Contracts for power in the coming week rose to roughly €250–263/MWh, up from €218/MWh a day earlier (Argus).

Romania is facing the same squeeze: too little cool river water, and too little spare power. Bucharest declared an August energy alert after Danube flows fell to roughly 1,600 m³/s, against a normal level of more than 4,000, putting pressure on the Cernavoda nuclear reactors (Agerpres).

Romania has moved from exporting electricity to importing it in the evening, drawing roughly 1,700 MW, mainly from Bulgaria (Profit.ro). Austria's Verbund, the country's largest hydropower producer, is generating roughly 30% below its seasonal average (Deutsche Börse/dpa-AFX).

The drought is hitting nuclear and hydropower at the same time, just as the heat is lifting demand. For now, Hungarian factories are first in line for the cost. If the Danube keeps falling, Hungary and its neighbours will be short of generation, cooling water and import capacity at the same moment.