The new nuclear plant at Hinkley Point in Somerset is set to be investigated by the European commission to ensure that the UK has followed state aid rules.
The price the government has guaranteed site operator EDF for every megawatt hour of electricity produced, static for 35 years, is thought to be high on the agenda. EU energy commissioner Günther Oettinger recently said that the “35-year feed-in tariffs may be a problem”.
There are concerns that the plans may be breaking state aid rules and EU competition laws, which have worried the EU Commission.
A spokesperson for the Department of Energy and Climate Change (DECC) said, “We have always been clear that EDF will only be offered an investment contract if it is fair, affordable, value for money and consistent with state aid rules.”
Commenting on the nuclear project’s inquiry, energy minister Michael Fallon said he had “no reason to believe the commission will block it”.
The investigation is expected to scrutinise not just the details of the project but also the involvement of Chinese investors, who are expected to hold a 49% stake in Hinkley Point C.
The EU competition commissioner Joaquín Almunia said in a speech on Monday, “It is up to member states to decide whether they intend to use nuclear power in their energy mix, and a few countries have indeed announced that they will build new nuclear plants.
“If national authorities eventually decide to support nuclear energy, it will be our responsibility to assess the compatibility of their subsidies under EU competition law on a case-by-case basis and directly under the provisions of the Treaty.”
The UK’s environmental audit committee recently criticised the government over energy subsidies and argued that Hinkley Point C was in fact being subsidised, despite government promises that it wouldn’t be.