Europe's competition authorities are to investigate the UK's offer of state guarantees to help finance new nuclear power plants. EU Competition Commissioner Joaquin Almunia has expressed concerns that the British government's deal with EDF to build a new nuclear plant at Hinkley Point in south-west England could contravene EU rules on state aid.
The government signed a deal with EDF in October, offering the French firm a guaranteed price for electricity for 35 years. Almunia told a Eurelectric conference in Brussels that the Commission would analyse the British proposal and would "probably" open a formal investigation.
EDF wants to build two £8 billion nuclear reactors at Hinkley Point and there is concern that a formal investigation by the Commission would delay the project by up to two years.The UK government agreed a 'strike price' of £92.50 per MWh for electricity from the new reactors. It says that the new plant is vital to secure the UK's future energy supplies.
Almunia gave no indication of how long an investigation might take but the commission sees the government's deal with EDF, Areva and China's General Nuclear Power as complex and highly novel. An investigation is therefore likely to be in-depth to investigate all aspects of the proposals. It is also likely to examine whether the UK government had alternatives to a guaranteed electricity price.