UK’s new nuclear deal gets a provisional green light from the EU

• 9 years ago (2014-09-24)
• Junior Isles

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The UK an EU negotiations on the funding of Hinkley Point C, the UK’s first new nuclear plant in a generation, have made a breakthrough, with Europe’s competition chief satisfied that the revised deal is now in line with EU restrictions on state support.

The commission is now expected to propose the project’s approval before the end of the European Commission’s current mandate in November.

“We reached an agreement with UK authorities on Hinkley. On this basis vice-president [Joaquín] Almunia will propose a positive decision to the college of commissioners. In principle a decision should be taken within this mandate,” a commission spokesperson confirmed.

Alongside the UK government, the other big winners from the agreement are French utility EDF, whose contract with the UK government now looks to provide a template for a new wave of state-backed nuclear plants across Europe.

Previously a commission investigation had raised serious concerns over £17.6 billion of public guarantees for Hinkley Point C and Brussels has since pushed to tighten provisions restricting excess profits, and amend the strike price in the contract for difference which guarantees minimum revenue for the plant and other low carbon generators.

EDF has been offered a strike price of £92.50 per MWh, or roughly twice the current wholesale price of power, rising to a nominal £279 per MWh in the final year of the funding scheme in 2058.

Two big state-owned Chinese nuclear companies, CGN and CNNC, have been lined up to help provide outside funding for the plant, and EDF has said the provisional agreement was “another positive step forward for this vital project”.

The draft deal will now require approval from the outgoing college of EU commissioners, including some ardent sceptics of nuclear energy. There are also concerns that a deal setting such an important precedent should not be pushed through in the commission’s final weeks.