nuclear-news

UK’s contract with EDF to build Hinkley nuclear station may not be valid

Hinkley Point nuclear power contract ‘may be invalid’ BBC News 6 May 14 The contract for building the UK’s first nuclear power station in a generation might not be “valid”, a leading legal academic has warned.

Former Liberal Democrat MP David Howarth, who lectures at Cambridge, said the deal with EDF over a plant at Hinkley Point could be seen as an “unjustifiable subsidy” under EU law.

The contract fixes a price for energy provided if the scheme goes ahead.

The government said the deal was “robust” and would give a “fair deal”.

The government announced last autumn that EDF, a French firm, would lead a consortium to build the Hinkley Point C station in Somerset, expected to supply around 7% of the UK’s electricity.

The company and ministers agreed a “strike price” of £92.50 for every megawatt hour, almost twice the current wholesale cost of electricity.

But Mr Howarth told BBC Radio 4’s Today programme there was a “problem with whether this is a valid contract at all”.

He argued that, under EU law, its terms could be described as an “unjustifiable subsidy” and that “because the system doesn’t allow for non-British generators to come within it, it might be a violation of the basic principle of EU law of freedom of movement of goods”. Mr Howarth added that English law could also be violated, as “the contract simply says what price it will get if it happens to supply a nuclear power station”, rather than compelling the company to build one.

Setting the price paid for the energy produced could also undermine the “long-standing legal doctrine that contracts which unduly bind the future discretion of governments to act in the public interest are void as being against public policy”.

“It’s quite possible that a contract of this size, over a period of 40 years, might find itself being caught by it,” he added…….http://www.bbc.com/news/uk-politics-27291087

May 7, 2014 - Posted by Christina Macpherson | Legal, UK