EU court confirms Hinkley subsidies do not breach rules

An EU court has upheld the decision by the European Commission to approve the subsidies awarded to the Hinkley Point C nuclear power station, saying they do not breach state aid rules.

The Austrian government sought to overturn the decision on the basis the promotion of nuclear power does not constitute a common interest of member states, and the reactor technology being used at the Somerset plant is not new.

However, the court ruling stated support “need not necessarily be an interest of all the member states or of a majority of them” to be permissible.

“Consequently, the commission did not err in taking the view that the UK was entitled to define the development of nuclear energy as being a public-interest objective,” it added.

The court said neither state aid rules nor the Euratom treaty require technological innovation for subsidies to be allowed.

It continued: “In any event, it is common ground that the technology to be used in Hinkley Point C is more advanced than that used in the nuclear power stations which it is supposed to replace.”

In October 2013, the UK government and EDF agreed the terms of contract for difference for the nuclear plant. The strike price was set at £92.50/MWh (2012 prices), falling to £89.50/MWh if EDF decided to proceed with a sister project at Sizewell C in Suffolk.

Following a year-long investigation, the European Commission approved the deal in October 2014.

The Austrian government appealed against the decision in July 2015, receiving support from Luxembourg. The Czech Republic, France, Hungary, Poland, Romania, Slovakia and the UK all intervened in favour of the commission.

The UK government also agreed to provide a £2 billion loan guarantee for the project and pay compensation if the plant was shut down early on political grounds.

China General Nuclear Power Corporation signed an agreement to buy a 33.5 per cent stake in Hinkley Point C in October 2015.