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Hinkley Point C: EU court rules in favour of deal challenged by Austria

The European Court of Justice has ruled that it was lawful for the European Commission to approve a subsidy deal between the UK government and Hinkley Point C stakeholders in response to a challenge by the Austrian government

The European Court of Justice has ruled that an EU approval of a subsidy deal between the UK government and Hinkley Point C power station project was lawful, following a challenge from the Austrian government.

Austria challenged the European Commission’s (EC) decision to approve a deal between the UK government and Hinkley Point C backers that gives EDF Energy and China General Nuclear (CGN) a guaranteed price for electricity, alleging that it broke EU rules on state aid.

It also argued that the commission’s approval of the project subsidy in 2014 should not stand as the nuclear power station was old technology.

Judges rejected both challenges, ruling that the commission was right to approve the deal under exemptions that permit state aid – including investment in new technologies.

A Department for Business, Energy and Industrial Strategy spokeswoman said: “We note the decision of the court.

“As outlined in our recent landmark nuclear sector deal, we are committed to the future of nuclear energy in the UK as part of our diverse low carbon energy mix.”

France, Slovakia, Hungary, the Czech Republic, Poland and Romania supported the UK-Hinkley Point C deal in court.

 

Why Austria challenged the Hinkley Point subsidy deal

ECJ, European Union
The Austrian government took issue with the subsidy deal that came with a guaranteed electricity price. (Picture: Wikimedia Commons)

Austria challenged the Hinkley Point C subsidy deal back in 2015 with the support of fellow EU member state Luxembourg.  

The approved subsidy deal between the UK government and Hinkley stakeholders EDF Energy and CGN will guarantee the companies a megawatt-hour electricity price of £92.50.

Energy regulator Ofgem said the market price was £50.74 in April of this year.

Energy consumers could be footed with a £50bn bill over the nuclear power stations 60-year lifespan under the deal, according to The Telegraph.

Austria and Luxembourg felt the deal would create an unfair advantage in the energy market and accused the UK government of failing to offer a public procurement procedure in its legal challenge.

 

What is Hinkley Point C?

Hinkley Point C is a nuclear power station under construction in Somerset near the sites of its predecessors Hinkley Point A and B.

Its two nuclear reactors are the first to be constructed in the UK since Sizewell B on the Suffolk coast – which switched on 23 years ago.

EDF energy – a partially state-owned French firm – has the majority stake in the project while CGN has a 33% share in the power station.

The two companies are set to spend a little more than £20bn on development on the dual reactor Hinkley Point C – a power station that EDF claims will produce electricity for as much as six million homes.

It also believes that 25,000 employment opportunities will be created by the project – including several hundred operational jobs once the station us up and running.

Picture: EDF