EU approves state aid for Hinkley Point C

• 9 years ago (2014-10-08)
• Junior Isles

Europe 1061 North America 998 Nuclear 640 Renewables 752

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The European Union has voted to back the UK’s plan to guarantee the price of power from Hinkley Point C, the country’s first new nuclear project in decades.

The decision was approved in a 16-to-5 vote with one abstention in a meeting of the College of Commissioners.

The British government helped to secure the deal by agreeing to a lower subsidy and a smaller share of windfall profits for the plant’s owner and operator, EDF, the European Commission said.

It is the first time the Commission has approved state aid for a new nuclear plant and the case serves as a precedent for other EU countries such as the Czech Republic, Lithuania and Poland looking for guidance on the level of state aid allowed.

“We have concluded that a market failure exists. Without support, this investment would not take place,” EU Competition Commissioner Joaquin Almunia told reporters.

It is expected, however, that the decision will be challenged in the European Court of Justice. Claude Turmes, Luxembourg Green Member of the European Parliament, said the decision was “the most outrageous EU Commission decision of the last 15 years. It is economic nonsense”.

The Hinkley Point C nuclear power station in southwest England is expected to cost £16 billion ($26 billion).

EDF will receive a guaranteed power price of £92.50 ($148.64) per megawatt-hour for 35 years, more than twice the current market rate, once the plant starts up in 2023.

Britain stressed to the Commission that replacing its aging nuclear reactors was vital to meeting its environmental goals.

Britain’s Energy Secretary Edward Davey said: “This decision shows the European Commission agrees that this is a good deal for consumers and enables us now to proceed to the next stage.”