Austria threatens legal action over EU approval for state-subsidised new British nuclear power plant

Hinkley Point nuclear power station signBy Our Brussels Correspondent

Austria is considering taking the European Commission to the European Court of Justice (ECJ) after it announced last week that Britain’s plans for €20.4 billion nuclear power plant do not constitute illegal and market-distorting ‘state-aid’

A deal to pay a guaranteed price for the power produced in the plant faces opposition from some EU policymakers, who want to overturn approval from the top European regulator.

The project, to be built by state-owned French utility EDF at Hinkley Point in south-west England, is crucial for Britain’s plan to replace a fifth of its ageing nuclear power and coal plants over the coming decade while reducing carbon emissions.

EDF – which also owns and operates the two Scottish nuclear power stations at Hunterston and Torness – sees it as a major export contract that will boost its nuclear know-how.

The Hinkley Point C case could serve as a Euro-precedent for countries such as the Czech Republic, Lithuania and Poland which have sought guidance on the level of state aid allowed to their nuclear operators.

The Commission, the EU executive, has never before approved state aid for a new nuclear plant.

But Austrian Chancellor Werner Faymann and Vice-Chancellor Reinhold Mitterlehner have sent a letter to outgoing European Commission President José Manuel Barroso saying Austria would “reserve” the right to take legal steps should the project gain a stamp of approval in Brussels.

“Should the EU Commission undertake this step, then it must expect a lawsuit at the highest court,” said Faymann, whose country prides itself in supporting green energy.

“Alternative forms of energy are worthy of subsidies, not nuclear energy,” he was quoted as saying by his spokesman.

Under the plan, Britain would be allowed to offer EDF a guaranteed power price of £92.50 (about €117) per megawatt-hour for 35 years, more than twice the current market rate.

The Commission said the British government had agreed to cut the subsidy by more than £1 billion pounds (€1.2bn) and that Britain’s share of any windfall profits over the plant’s lifetime would amount to billions of pounds.

Hinkley Point would set a negative precedent of opening this type of subsidy for nuclear energy. The Commission must prevent this. If not it must expect a lawsuit from Austria at the European Court of Justice,” Mitterlehner said.

Greenpeace EU legal adviser Andrea Carta said: “This is a world record sell-out to the nuclear industry at the expense of taxpayers and the environment.

It’s such a distortion of competition rules that the Commission has left itself exposed to legal challenges.

“There is absolutely no legal, moral or environmental justification in turning taxes into guaranteed profits for a nuclear power company whose only legacy will be a pile of radioactive waste. This is a bad plan for everyone except EDF.”

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