Britain's blockbuster nuclear deal to get EU nod
Hinkley Point - Photo Richard Baker - from geograph.org.uk
(BRUSSELS) - The EU will recommend approval of Britain's ambitious plan to build its first nuclear plant in a generation, with backing from French and Chinese energy giants, after ruling that it met state aid rules, a spokesman said Monday.
The Hinkley Point project, to be built by France's EDF for $26 billion, is one of the world's most ambitious nuclear deals and is seen as a key boost to an industry brought to its knees by the 2011 Fukushima disaster in Japan.
The European Commission launched the probe in late 2013, delving closely into the project's elaborate price guarantee system that critics claim will prove hugely expensive to British consumers for decades to come.
Environmentalists also see Hinkley Point as an unnecessary bow to nuclear energy just when the use of renewables, such as wind and solar power, is beginning to take hold.
"As our discussions with British authorities have ended with an agreement, the Competition Commission will recommend a positive decision" on the Hinkley Point project, a spokesman for Commissioner Joaquin Almunia said.
"In principle, the decision should be made in October," he added.
A year ago, the British government signed the huge GBP 16-billion ($26-billion, 18.9-billion-euro) deal for EDF to build two reactors at Hinkley Point C in southwestern England to meet Britain's future energy needs.
Under the accord, EDF gets a 45-50 percent stake, China General Nuclear (CGN) and China National Nuclear Corporation (CNNC) will have a combined 30-40 percent and another French firm, Areva, 10 percent.
- Doubts after Fukushima -
The project is based on an agreed electricity price, locked in for 35 years, of GBP 92.50 per megawatt hour plus inflation, which is about double the prevailing market rate in Britain.
Crucially, if the market price falls below that level, the British government will make up the difference, a potentially heavy burden which critics claim could substantially disrupt the European electric power market.
Anti-nuclear activists at Greenpeace called the impending approval a "backroom deal", pushed through at the behest of the nuclear power lobby before the Commission ends its mandate at the end of October.
"Only a year ago the Commission said that Hinkley was 'in principle incompatible under EU State aid rules'," Greenpeace EU legal adviser Andrea Carta said in a statement.
"Now, under pressure from the UK government and French nuclear operator EDF, the Commission is preparing to perform a U-turn," he added.
At full capacity, the two new reactors will be able to produce seven percent of Britain's electricity, enough to power five million homes.
Britain currently has 16 reactors which provide about 20 percent of the country's energy needs and London is placing nuclear power at the heart of its low-carbon energy policy.
This is in stark contrast to Europe's biggest economy Germany, which vowed to phase out nuclear power in the wake of Japan's 2011 Fukushima disaster, the worst atomic disaster since Chernobyl.
More than three years after the disaster, where a tsunami sent reactors into meltdown, global opinions remain deeply divided on the safety of the nuclear technology.