Hinkley Point expansion near Burnham-On-Sea gets go-ahead
new £24.5bn nuclear power station at Hinkley Point near
Burnham-On-Sea is to go ahead after it received final approval
from European Union regulators.
European Commission said on Wednesday (October 8th) that Britain
had agreed to "modify significantly" the financing for
the project, reducing the burden on British taxpayers.
total 16 commissioners voted in favour of the project, just ahead
of the 15 votes needed for approval.
Energy is due to build the plant, which will be the first in the
UK in almost 20 years.
European Commission had been examining whether the funding for
the project broke state aid rules.
it said the changes agreed by the British authorities would cut
the subsidy by more than £1bn, meaning that state aid would
remain "proportionate to the objective pursued, avoiding
any undue distortions of competition".
Commission said these changes made meant gains generated by the
project would be better shared with UK consumers.
District Council welcomed the announcement. Leader of Council
Duncan McGinty told Burnham-On-Sea.com: "Sedgemoor District
Council is continuing to work closely with other local authorities
in Somerset, EDF Energy and Government and is determined to maximise
the positive economic benefits for local communities and businesses,
as well as minimising the impacts from Hinkley Point C and its
Cox, CEO of the Somerset Chamber of Commerce, said: "The
Somerset Chamber is delighted, but not surprised, that the EU
has not objected to the Hinkley Point C development under its
State Aid regulations. This is good news for EDF Energy and even
better news for Somerset suppliers. This is another crucial step
along the long road to the construction of Hinkley Point C, which
will provide millions of pounds of worth of business for Somerset
and South West businesses."
Stop Hinkley spokesperson Allan Jeffrey told Burnham-On-Sea.com:
"This deal is clearly illegal under European law; it will
saddle UK consumers with the bill for paying huge subsidies for
decades, and yet there are more cost effective and safer ways
of providing low carbon electricity or not using the energy in
the first place. It is mind boggling how the UK government managed
to convince the Commissioners to go along with this crazy plan
without even the pretence of a competitive process."
estimated the project would now cost £24.5bn to build. The
updated figure, much higher than the government and EDF's original
£16bn forecast, includes the impact of inflation as well
as interest costs for the 10 year construction period.
This is the first time that the European Commission has approved
significant state aid for a new nuclear power plant - and as such,
it is a big step forward for the European nuclear industry.
decision will serve as a precedent for other countries, such as
Poland and the Czech Republic, that want to know how much public
money they can offer to companies as they look to expand their
the legal fight over the funding for Hinkley Point C is almost
certainly not over. The European Court of Justice will be asked
for an opinion. Austria says the Commission's decision is supported
by neither economic nor ecological sense.
member states are also concerned that it flies in the face of
the EU's stated aim of promoting renewable energy sources, such
as wind and solar.
government had already agreed that French firm EDF will be paid
a so-called "strike price" of £92.50 for every
megawatt hour of energy Hinkley C generates. This is almost twice
the current wholesale cost of electricity, but this was a deliberate
attempt by the government to compensate for the high cost of building
the Commission said that if EDF's overall profits exceeded the
rate estimated at the time it was awarded the contract, any gains
would be shared with the public.
said it had also defined a second, higher threshold above which
the public would be given more than half of the gains, through
lowering the cost of the "strike price".
increase in the profit rate of only one percentage point, for
example, will generate savings of more than £1.2bn,"
said this agreement would now last for the entire lifetime of
the project - an estimated 60 years.
modifications will also achieve significant savings for UK taxpayers.
On this basis and after a thorough investigation, the Commission
can now conclude that the support is compatible with EU state
aid rules," said Commission Vice-President Joaquin Almunia.
two reactors planned for Hinkley near Burnham-On-Sea, which will
provide power for about 60 years, are a key part of the coalition's
drive to shift the UK away from fossil fuels towards low-carbon
nuclear power station is expected to begin operating in 2023.
The government estimated last year that with new nuclear power
- including Hinkley - the average energy bill in 2030 will be
£77 lower than it would have been without the new plants.
The decision was controversial, with green critics believing that
the government should have offered subsidies to renewable energy
sources, such as wind and solar energy.