UK Aid for Nuclear Plant Approved by EU Court

(CN) - The European General Court signed off Thursday on the U.K. government’s commitment of up to $22.5 billion to open a new nuclear-power generator at Hinkley Point.

Austria had brought a challenge before the court in Luxembourg three years ago after the European Commission determined that the aid was justifiable.

While the case was pending Luxembourg intervened in support of Austria, while the Czech Republic, France, Hungary, Poland, Romania, Slovakia and the UK intervened in support of the commission.

The Fifth Chamber of the General Court dismissed Austria’s action Thursday, saying each member state has the right to choose what energy source it prefers to use.

Press representatives for the U.K. and Austrian governments did not return a request for comment after business hours Thursday.

The U.K.’s aid is set to benefit power plant operator NNB Generation, a subsidiary of EDF Energy. All told, construction of the plant is expected to cost $25.8 billion.

“EDF Energy believed that the state aid investigation by the European Commission was exhaustive, fair and robust,” the company said in a statement. “We were confident it would withstand legal challenge.”

EDF ranks as Great Britain’s largest electricity supplier by volume. Apart from the thousands of people working on the plant’s construction,

EDF says the plant will create more than 25,000 once it is operational. “Nuclear energy has a vital role to play in providing reliable low carbon electricity for the future and help meet climate change targets,” the company said in a statement.

Located in Somerset, on England’s southwest coast, the new nuclear facility at Hinkley Point is set to open in 2025, with an operational life of 60 years.

EDF notes on its website that the two new nuclear reactors it is building at Hinkley Point C are “the first in a new generation of nuclear power stations in the UK providing low-carbon electricity for around 6 million homes.”

The U.K.’s aid consists of three components: the credit guarantee is meant to ensure the timely payment of principal and interest of up to $22.5 billion in qualifying debt.

In the event that the plant shuts down prematurely, the aid also includes compensation guarantees and provisions meant to ensure price stability for electricity sales. NNB investors are also guaranteed compensation in the event of that the early shutdown occurs because of political grounds.

With the understanding that the risk of distortion of competition is limited, and that the negative effects of the aid in question are offset by its positive effects, the commission found the aid necessary for the U.K. to fulfill its objective of creating new nuclear energy generating capacity.

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