New EU state aid rules a blow for UK nuclear energy plan | WPN World People News

New rules on state aid adopted by the European Commission will make it harder for the UK and other governments to subsidise nuclear energy projects like the new reactors at Hinkley Point, said Greenpeace.

The UK government wants to grant unprecedented levels of public subsidies and disproportionately favourable conditions for the mainly state-owned French energy giant EDF to build two new nuclear reactors at Hinkley, in the south-west of England. The Commission is currently investigating the UK plan for a possible breach of EU competition rules.

UK ministers lobbied the EU executive until the very last minute to make nuclear energy eligible for aid under the new rules.

UK ministers came under fire after agreeing to pay EDF a fixed amount for the electricity generated at the plant over the next 35 years which was set at double the current market price. It is estimated this strike price agreement will cost bill payers more than €36 billion (£30 billion) over the plant’s lifetime, leading commentators to brand Hinkley as the “world’s most expensive power station”’.

Commenting on the new state aid rules for energy, Greenpeace UK energy campaigner Louise Hutchins said: “These new rules are a serious blow for Cameron’s plans to waste billions in bill payers’ money on Hinkley, probably the world’s most expensive power station project. It is now clearer than ever that nuclear energy is not eligible for state subsidies and that the UK plan is at odds with competition and EU energy market laws. If the government is really worried about energy security it should plough investment into Britain’s clean renewable energy where prices are tumbling, and into energy efficiency measures.”

But the new rules, which will come into force on 1 July 2014, have also been criticised for putting the brakes on small and mid-scale renewable energy projects.

Greenpeace submitted to the Commission earlier this week a legal analysis of the planned state aid for Hinkley, outlining how it would violate EU competition rules.

Source: Greenpeace EU Unit