Hungary May Cut Factory Power

Hungary has moved to ration electricity to industry after low water levels on the Danube forced Paks, the country's only nuclear power station, to cut more than half its output. Emergency decree 118/2026, published on Friday evening, gives the national grid operator the power to disconnect large industrial users from the network if voluntary cuts are not enough (444, HVG).

Prime Minister Péter Magyar has put households at the back of the queue for restrictions. Factories will take the hit first. For Malta, where energy security usually means interconnectors, gas supply and the limits of an island grid, Hungary is a reminder that even a large continental system can be brought to the edge by one physical constraint: a river too low to cool a nuclear plant.

How a dry river shuts a power plant

Paks does not use Danube water as fuel. It uses it for cooling. Water is pumped through cooling circuits to carry away waste heat, then returned to the river. When the river level drops far enough, two problems appear at once: the returned water can breach environmental temperature limits, and the cooling-pump intakes can sit above the falling waterline (Die Presse, MVM).

Over the past week, MVM, the state company that runs Paks, reduced output unit by unit as the Danube kept falling. By 1 August, production was down to about 940 MW, compared with a normal 2,000 MW. The Danube stood at -124 cm and was still dropping (VG). MVM says -134 cm would force a full shutdown. Forecasts point towards -144 cm.

Factories absorb the blow

The decree gives MAVIR, Hungary's grid operator, a three-step process. First it can ask large users drawing more than 0.5 MW to cut consumption voluntarily. Then it can issue mandatory reduction orders. If a company still does not comply, MAVIR can disconnect it after two hours' warning (HVG).

Battery plants, cement works, chemical factories and car manufacturers are the stated targets (24.hu). The choice is political as much as technical: industry absorbs the disruption so domestic consumers 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 will not be compensated for lost production. In practice, that means stopped shifts, idle production lines and losses carried by the factory, not the state.

Hungary has found some relief: about 240 MW of voluntary industrial load cuts, plus around 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 buying electricity during a regional heatwave is exactly when imports become costly, because every neighbour is trying to cover the same evening peak.

The whole Danube corridor is running short

Europe's power markets are connected, so Hungary's problem does not stay neatly inside Hungary. When Budapest bids for more imported electricity, it competes with neighbouring states for the same supply. That pressure feeds into prices across Central Europe.

On 29 July, next-day electricity prices were tightly grouped: €132/MWh in Hungary, €133/MWh in Romania and €139/MWh in Croatia. Hungary's hourly price, however, moved from €12/MWh at midday, when solar generation was strongest, to €268/MWh in the evening (Serbia Energy). Contracts for power in the following week rose to about €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 generation. Bucharest declared an August energy alert after Danube flows fell to roughly 1,600 m³/s, compared with a normal 4,000+, putting pressure on the Cernavoda nuclear reactors (Agerpres). Romania has moved from electricity exporter to evening importer, drawing about 1,700 MW, mainly from Bulgaria (Profit.ro). Austria's Verbund, the country's largest hydropower producer, is generating around 30% below its seasonal average (Deutsche Börse/dpa-AFX).

The pressure is therefore coming from both sides of the system. Drought is cutting nuclear and hydropower output, while the heatwave is lifting demand. 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 time.