Brussels, 08/10/2014 (Agence Europe) - This highly controversial decision did not receive unanimous support from the College of Commissioners but on Wednesday 8 October, the European Commission gave the go-ahead to British government support for EDF to carry out a project for building a new generation nuclear plant (EPR) at Hinkley Point in the southwest of England. The Commission initially had doubts about the compatibility of this project with EU rules on state aid but it was amended following intensive discussions with the British authorities.
According to the Commission, estimated construction costs stand at €31 billion, much higher than estimates made by EDF and the British government, which put these figures at €19 billion. The plant will be operational in 2023 for around 60 years.
The Commission explained that the British authorities had demonstrated that this aid would be used to tackle market shortcomings, in other words, the project would be impossible without public funding, which the Commission originally had doubts about. The project will remain in proportion to the objectives pursued, points out the Commission and the amendments made to the initial plan will reduce British citizens' financial contributions to the project.
The plan is to create, together with the EDF, a price for purchasing electricity that guarantees the company a stable income for a 35-year period. This provision is generally only applicable to renewable energies. EDF will also benefit from a public guarantee regarding debts contracted during the construction phase of the plant.
The Commission estimated that the remuneration level in the state guarantee by the operator was too low for this kind of risk profile project. It therefore significantly increased it and reduced the level of subsidy to around €1.3 billion.
In the event of profits being much higher than planned or the costs being much lower, benefits must be shared with British consumers. If the profits increase by one percentage point, there will be a saving of €1.5 billion for the British authorities. This mechanism will not only be in place for 35 years but throughout the project's 60-year life cycle. In the long term, the project will ensure 7% of the United Kingdom's electricity supplies.
The Greens denounce a “conspiracy”. The vice-president of the Greens/EFA, Michèle Rivasi, said that, “there is no doubt at all that the generous conditions the United Kingdom offered to the EDF are the equivalent of illegal state aid. British taxpayers will not forget the EU's decision that they will be paying for”. The French MEP denounced the fact that this was contrary, “to the benefits provided by renewable energies in Germany” and asserted that this decision would have a devastating impact, “on real future investments” in clean energies. She added that, “this forced nuclear renaissance is against competition and internal market rules. It has been defended and protected by the Commission and is a real scandal”. The Luxembourg MEP, Claude Turmes, also denounced the, “explosive mixture of economic madness, non-respect for the polluter pays principle and internal energy market rules”. Greenpeace said that the project only benefitted the EDF. Austria confirmed that it would take the matter to the European Court of Justice and in a press release its government indicated, “We will not accept the decision of approving subsidies to nuclear power”.
During a press conference, the vice-president of the European Commission, Joaquín Almunia, insisted on the fact that energy mix questions were entirely the prerogative of member states and the Commission had done its work to establish whether the project was compatible with EU state aid rules. He stated that the distribution of different responsibilities had been clearly set out but did say that the decision made on Hinkley Point would not create a precedent and similar projects would be judged on their own merits. He also said that public funding for renewable energies was generally higher than in the current case. (EL/EH)