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The UK’s subsidy proposals for the Hinkley Point C nuclear power station and new biomass projects are set to move forward as the energy secretary holds crunch talks later today with the EU’s competition commissioner.
The meeting between Ed Davey and commissioner Joaquín Almunia comes a day after the EC awarded state aid approval to the regional aid for the Netherlands, Belgium and Italy, as well to France for a €86.6 million transmission research programme.
The European Commission confirmed the scheduled meeting between Davey and Almunia, but stopped short of saying that a decision could be made
A spokesperson from the Department of Energy and Climate Change (Decc) said: “We are continuing to engage with the Commission as it progresses its assessment of the Hinkley Point C state aid case.”
The European Commission (EC) opened an “in depth” state aid investigation into the Hinkley Point C deal in January and Almunia added that he expected a decision to be made before the end of the year.
Decc agree a guaranteed price of £92.50/MWh for 35 years with EDF Energy for the electricity that is set to be generated at the Hinkley Point C plant.
This would then fall to £89.50/MWh if EDF Energy makes a final investment decision to go ahead with another power station at Sizewell.
The EC has questioned the level of support, such as the guaranteed power price and construction guarantees, that the UK government has offered, when new nuclear power plants are being built in France and Finland without such measures.
On the state aid negotiations, Citigroup said: “In our view, the key issue for the nuclear and biomass CfDs will be the lack of competition in arriving at the administratively set strike prices and the total returns achievable on the projects.”
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