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EU Probes U.K. Nuclear Plant

EU Probes U.K. Nuclear Plant
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Τετ, 18 Δεκεμβρίου 2013 - 18:38
European Union regulators Wednesday opened an in-depth probe into Britain's planned flagship nuclear plant, Hinkley Point, to assess whether the project breaks state-aid rules.
European Union regulators Wednesday opened an in-depth probe into Britain 's planned flagship nuclear plant, Hinkley Point, to assess whether the project breaks state-aid rules.

The European Commission, the EU's executive arm, set out its concerns in a list of potential breaches of state-aid regulations for the financing of the Somerset-based plant, which will enjoy a guaranteed minimum power price for 35 years. The U.K. says Hinkley is vital to averting a future energy crunch and promoting low-carbon energy.

EU regulators said they would focus their probe on whether the deal--which guarantees Electricite de France SA a price of GBP92.50 ($150.45) for every megawatt-hour of power that Hinkley generates for 35 years--constitutes a fair price. The set price is double current wholesale prices and makes the U.K. the first European country to guarantee a price over such a long period in a nuclear project.

The EU's antitrust chief, Joaquin Almunía, referred to the plans as "a complex measure of an unprecedented nature and scale," and said regulators need to investigate thoroughly its impact on the U.K. and the EU internal energy markets.

The EU is also looking into loan guarantees for the scheme.

If it goes ahead as planned, Hinkley will be Europe 's first nuclear plant to be built since Japan 's Fukushima disaster in 2011.

The commission said it would launch a public consultation into Hinkley that could take four to eight weeks. The U.K. government will then have a month to respond before entering into open-ended discussions with officials.

British officials argue the project shouldn't be seen as state aid, but at the same time concede that it could be viewed as permitted state aid. Under EU rules, state support can be granted as long as a project promotes economic development without unduly distorting competition, among other criteria.

The commission said EDF will "ultimately...not be exposed to market risks" and that it would also receive a state guarantee covering debts it might accrue in the construction of the plant.

Although U.K. officials have said they hoped the EU probe would be closed by the summer, Mr. Almunia said Wednesday he wasn't bound by deadlines. "This investigation is not the simplest I have on the table. The [length of the probe] depends on the cooperation of the member state in question. But I cannot commit to a duration [of the probe]," Mr. Almunia told reporters in Brussels .

Hinkley's two reactors will cost GBP8 billion each and aim to supply enough power to supply 7% of Britain 's homes for 60 years.

 Britain gave the go-ahead to the EUR19 billion ($26.16 billion) plant in south-west England in March and signed a contract with French state-controlled utility EDF to build it at the end of October.

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