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28/09/2016

Commission faces EU court over aid to Britain’s Hinkley Point nuclear plant

UK & Europe

Commission faces EU court over aid to Britain’s Hinkley Point nuclear plant

Hinkley Point nuclear power station. [Wikimedia]

A German energy cooperative will take legal action against the European Commission for approving state aid for a £16 billion (€22 billion) nuclear power plant in Britain, it said on Wednesday (4 March), arguing it threatens to distort competition.

The project, to be built by French utility EDF at Hinkley Point in southwest England, is crucial for Britain’s plan to replace a fifth of its ageing nuclear power and coal plants in the coming decade while reducing carbon emissions.

The plan to pay a guaranteed price for power produced at the plant faces opposition from some other countries and some EU policymakers, as well as some other energy suppliers.

“Highly subsided nuclear power from this plant will noticeably distort European competitiveness,” said Soenke Tangermann, managing director of Greenpeace Energy, which describes itself as Germany’s largest national independent energy cooperative.

Tangermann said it would affect prices at the power exchange in Germany, and could also set a precedent. “This effect will have economic disadvantages for committed green power providers like us,” he said in a statement.

“Unlike Prime Minister David Cameron claims, a multi-billion tax gift for the new reactor at Hinkley Point is not just a purely British affair,” Tangermann said.

He added that the group would file a plea for annulment at the European Court of Justice in Luxembourg as soon the Commission’s approval was published.

Non-nuclear Austria said in January it would take the European Commission to court within two months of it publishing its decision to approve Britain’s plans for Hinkley Point.

>> Read: Austrians resist EU funding for UK’s Hinkley Point nuclear project

In October, the EU executive cleared the subsidy scheme that will enable Hinkley and other nuclear reactors to be built as part of a nuclear renaissance in Britain, where atomic energy now forms a key part of future energy strategy.

>> Read: Hinkley nuclear reactor project gains EU approval, leak reveals

Germany, Europe’s biggest power market, is in the midst of an ambitious switch to green energy as it phases out atomic energy. Greenpeace Energy says it supplies more than 111,000 customers with clean electricity.

Background

If built, Hinkley would be the first British nuclear reactor since Sizewell B in 1995. Because of the 35-year length of its operating contract, and the 10 years it would take to build, its cost and policy implications stretch far into the future.

The deal allows French-owned electricity generator EDF to be guaranteed £92.50 per megawatt hour over the 35-year life of the Hinkley plant.

This subsidy, twice the current price of electricity, will be paid out of household energy bills.

Further Reading

European Commission

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