EU anti-trust regulators on Thursday (10 March) cleared a partnership between French power company EDF and Chinese nuclear firm CGN to build nuclear power plants in Britain, including the controversial Hinkley Point project.
Hinkley Point, which EDF will build in partnership with CGN, will be Britain’s first nuclear power plant in decades and one of the world’s most expensive, with a projected cost of £18 billion (€23.2 billion).
“The Commission’s investigation found that competition in the wholesale supply of electricity in the UK will not be hindered by the transaction given the moderate market share of EDF, the very limited market shares of CGN in this market and the presence of other competitors,” the European Commission said in a statement.
The decision comes just days after the shock resignation of EDF’s finance chief which sparked heightened concerns over the financial viability of the Hinkley Point C project in Somerset, southwest England.
Hinkley Point is to provide 7% of Britain’s energy needs by 2025.
EDF has yet to give its final green-light to the enormous project, but French President François Hollande and British Prime Minister David Cameron pledged their support for the project at a summit last week.
In a joint statement, the two governments underlined “the crucial role of nuclear energy in the transition to a low-carbon economy as part of an energy diversification policy.”
EDF is 84.5% owned by the French state.
In a contested decision in 2014, the European Union already approved the project’s complicated funding, sidelining concerns about whether aspects of the deal amounted to state subsidies.
The project encountered fierce resistance from activists and several member states at the time, but a vote by the bloc’s 28 commissioners narrowly backed the deal.
EDF said the European Commission decision “shows that the robust agreements underpinning the project continue to pass independent scrutiny”.
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.
This has led an alliance of green energy providers and municipal utilities in Germany and Austria to lodge a complaint with the European Court of Justice (ECJ).