nuclear-news

Plans for the £16bn Hinkley Point plant received state aid clearance from the European Commission last year but Austria has vowed to challenge this, alleging that subsidies for the project constitute illegal state aid.

Although the Government and EDF both insist the appeal, expected to be lodged this week, has no merit, it is understood they are yet to agree on what would happen in the unlikely event Austria does win.Andrea Leadsom, the new energy minister, said on Tuesday she was “confident that the key investment decision on Hinkley C will happen soon, which will enable construction to start”.

But speaking on the fringes of the Nuclear Industry Association’s annual conference, Ms Leadsom also confirmed that the Government was “looking very closely” at the issue of how the project could go ahead with a state aid challenge ongoing.Austria’s state aid appeal is likely to hang over the project for at least a year and potentially as long as six years – during which time billions of pounds would be spent on construction.

The Government and EDF are believed to be targeting a final investment decision by October.A series of issues remain outstanding including EDF’s takeover of reactor-maker Areva’s nuclear business, deals with Chinese investors, and finalising contracts with the Government.

• Hinkley Point new nuclear power plant: the story so far………

Writing on legal website Lexology, lawyers at Shearman and Sterling LLP wrote: “While the prospect of success is low, even a small chance of success creates additional risk for project financiers.

“In a worst-case scenario, where the Commission makes an adverse decision, the UK Government’s support scheme – including the strike price and guarantee – would be ruled unlawful and unenforceable, with any aid already received having to be repaid. A competitor or other party with standing could apply to the UK national court to enforce this.

“While this outcome is the least likely, it may have a severely adverse impact on investors in the Hinkley Point C project.”

They added that “investors may find insuring themselves contractually (e.g., via indemnities or similar means) difficult” and that “any provision seeking protection from the UK Government for such an eventuality could itself risk being struck down as unlawful State aid”…..http://www.telegraph.co.uk/finance/newsbysector/energy/11709083/Government-and-EDF-in-talks-over-liabilities-if-Austria-wins-nuclear-state-aid-appeal.html