European laws on competition may stall UK’s nuclear power plans

Nuclear power plans threatened by European commission investigation Proposed nuclear reactor in Somerset could be delayed by two years if competition directorate launches full-scale investigation, Juliette Jowit and Ian Traynor The Guardian, 14 March 2013 Britain’s planned nuclear reactor programme could be delayed for years, and the nation’s long-term energy policy thrown into turmoil, as European commission officials launch the first stage of a formal investigation into the use of taxpayer subsidies to support the development.

Sources in Brussels have indicated that Britain hopes to win approval for a multibillion-pound deal with French energy giant EDF at the initial stage, which usually takes two months.

But if after a preliminary investigation the EC’s competition directorate decides to launch a full-scale investigation, that would last at least 18 months and probably two years or more. Such an outcome is made more likely by reports that ministers and EDF are discussing a minimum or “strike” price for the nuclear-generated electricity of a little under £100 per megawatt hour – nearly double the current market rate.However ministers will be hoping that their regular meetings with EC officials will make it more likely that a full inquiry will be avoided.

Under the proposals, a nuclear power station – the first for a generation – will be built at Hinkley in Somerset, and the government will guarantee a minimum price for the electricity produced for 30-40 years, a deal which could cost customers a billion pounds a year or more.

News of the latest obstacle to the nuclear building programme comes before the expected announcement next week by the energy secretary, Ed Davey, of whether EDF has won planning permission for the 3.2 gigawatt Hinkley nuclear plant. He is widely expected to give the scheme the go-ahead…..

A delay imposed by Brussels would cast new doubt on the £14bn project as it would be likely to make it harder for EDF to raise the capital needed until its contract with the government was fully approved. That in turn would delay the entire nuclear build programme, under which the government wanted 16 gigawatts of new nuclear power operating by the middle of the next decade.

“The government wouldn’t need state aid approval for nuclear if it wasn’t trying to subsidise a risky technology that could wind up costing more than the renewable alternative,” said Doug Parr, policy director for the anti-nuclear campaign group Greenpeace….http://www.guardian.co.uk/environment/2013/mar/14/nuclear-power-european-commission-investigation