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09/10/2014

European Commission gives the nod to Hinkley power plant

Words: Laura Edgar
Illustrative view of twin reactors Hinkley Point C

Revised plans for £24.5 billion Hinkley Point C nuclear power station in Somerset, agreed between the UK Government and EDF Energy, have been approved by the European Commission now that they comply with EU state aid rules.

The terms of the project financing have been modified, including a reduction in the financial contribution made by UK citizens while the state aid provided “will remain proportionate to the objective pursued”. 

The commission's decision does leave key elements of last October’s agreements unchanged: The contract will last for 35 years while the strike price remains at £92.50/MWh, which will drop to £89.50/MWh if the planned power station for Sizewell goes ahead.

The changes follow doubts raised by the commission in December last year on nearly all aspects of the project - explaining the incompatibilities under EU state aid rules. The commission was also concerned about the amount of government money being provided and the nature of the contract. It has now reinforced measures designed to share future benefits with customers.

Commission vice-president Joaquin Almunia said: "After the commission's intervention, the UK measures in favour of Hinkley Point nuclear power station have been significantly modified, limiting any distortions of competition in the single market. These 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."

Final agreements with strategic and financial partners remain to be concluded while the commission and the secretary of state for energy and climate change must approve contract agreements as part of the Funded Decommissioning Programme. 

EDF chairman and CEO Henri Proglio said: “The approval by the European Commission is a major milestone for the Hinkley Point C project. Building EPR reactors in the UK will provide huge benefits for both countries in terms of job opportunities, economic growth and skills, further strengthening France and the United Kingdom's fruitful partnership.”

Image courtesy of EDF

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