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29/09/2016

Energy providers sue Commission over Hinkley Point subsidy

UK & Europe

Energy providers sue Commission over Hinkley Point subsidy

With two new pressurised water reactors, Hinkley Point C is intended to replace one-fifth of the UK's aging nuclear and coal power plants.

[Mark Robinson/Flickr]

An alliance of green energy providers and municipal utilities in Germany and Austria have lodged a complaint with the European Court of Justice (ECJ) over subsidies for the planned British nuclear power station Hinkley Point C. EurActiv Germany reports.

The ECJ should “annul” the European Commission’s approval of this state aid, argues the alliance of ten energy companies. They say the “excessive nuclear power subsidies” amount to an “unlawful operating aid”.

This “should never have been approved”, said Sönke Tangermann, chairman of Greenpeace Energy. Together with the Hamburg-based green energy provider, the Austrian oekostrom AG as well as the Stadtwerke Aalen, Bietigheim-Bissingen, Bochum, Energieversorgung Filstal, Mainz, Mühlacker, Schwäbisch Hall and Tübingen have joined in filing the lawsuit.

In October 2014, the European Commission originally approved the aid for Hinkley Point C.

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

Recently, claimants commissioned scientific studies which argue that guaranteed state subsidies for nuclear power from Hinkley Point C will add up to around €108 billion.

At 12 cents per kilowatt hour, the guaranteed remuneration would be three times the market price – adjusted for inflation – and is planned to be fixed for 35 years.

The claimants are accusing the Commission of “legal and procedural error”. They fear that, together with other nuclear energy projects, the comprehensive subsidies package could create “massive distortions” in the European energy market and create competitive advantages for nuclear power.

From the perspective of municipal utilities (Stadtwerke), economic efficiency of decentralised power generation plants would suffer significantly from the planned subsidies, explained Achim Kötzle, managing director for the energy economy at Stadtwerke Tübingen.

“We see the danger that the European energy markets could be flooded with subsidised nuclear power and regional, highly-efficient and ecological power generation will be forced off the market,” Kötzle explained.

In the meantime, Austria has also filed a complaint. But Germany has stayed out of the suit. The German government has so far refused to join in taking legal measures against the controversial subsidy decision, invoking political grounds for doing so.

Now, Greenpeace Energy is calling on the German government to sue the Commission for approving the subsidies.

>>Read: Greenpeace, German utilities launch suit against UK nuclear plant

“Whoever simply accepts the costly, risky and competition-distorting return of nuclear energy in Europe, is betraying the Energiewende in their own country,” Tangermann emphasised.

Within just a few weeks, more than 15,000 people have followed an appeal from the energy community and have resorted to email, postcards or online petitions to urge German politicians to join in taking legal action against the subsidy approval for Hinkley Point C.

The deadline for member states or companies to file a complaint against the Commission’s decision is 23 July.

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