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The end is nigh: last rites for Hinkley C Updated for 2026

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I’ve always said that the two proposed new reactors at Hinkley Point would never get built. Now I’m not just saying it: I’m absolutely convinced that they’ll never get built.

A couple of weeks ago, EdF formally confirmed that no decision would be taken on Hinkley Point before the General Election, and probably not before the end of the year.

The reason it gave was that: “We are in the final phase of negotiations, but that phase can take a considerable amount of time, depending on the number of problems left to resolve.”

And that list of problems is daunting. First, it needs to be able to sign final deals with co-investors, including the Chinese, who are beginning to cut up rough. Then it needs final confirmation from the European Commission and the UK Government for a whole load of issues regarding the waste transfer contract.

It also needs to finalise a £10bn loan guarantee from the Treasury. And, despite months of discussions, it needs to conclude negotiations with the UK Government regarding the subsidy contract.

Legal challenges loom large

You’ll notice that this list does not include any delays that may be caused by the Austrian Government challenging the EU’s decision to approve as ‘legal’ (within the EU’s state aid rules) the billions of pounds of subsidy that the UK Government will pump into the project.

EdF doesn’t talk about that, as it still hopes that the Austrians will be ‘persuaded’ by the UK Government to withdraw its challenge. And the UK Government is certainly intent on doing exactly that!

Over the last few months, details have been trickling out about the retaliatory measures UK Ministers are now threatening in a demonstration of state bullying that beggars belief. A leaked memo showed UK ministers asserting that “the UK will take every opportunity to sue or damage Austria in the future.”

Which shows just how desperate the Coalition Government has become, having put all its notionally ‘low carbon’ eggs in the nuclear basket – a decision that has forced ministers to go to extraordinary lengths to get the Hinkley Point project over the line.

UK Government bending over backwards … to no avail

Influential commentator Dr Philip Johnstone, Research Fellow at the Science Policy Research Unit, put it as follows: “Every wish of the nuclear industry has been granted by the UK Government. The British planning system has been ‘streamlined’, with nuclear a key inspiration of the need to speed things up.

“The Government has created one of the best institutional contexts in the world for developing nuclear, with a new Office for Nuclear Regulation and the Office for Nuclear Development, and has ensured that nuclear regulators are equipped to pre-license designs for new build.

“As well as this, a strategic siting assessment and environmental assessment were carried out, further ‘streamlining’ the process of new nuclear construction. Electricity Market Reform has been brought in, where, despite being a mature technology, nuclear was granted Contracts for Difference at double the current market rate for the next 35 years.”

But none of that cuts much ice with the Austrians, and if their challenge proceeds, nobody quite knows how long a delay that might entail. It will certainly be years, not months.

And it just got worse for the Coalition Government. We heard last week that EdF is now going to have to deal with another legal challenge – this one from a German energy Co-operative (a very successful enterprise, founded by Greenpeace 15 years ago) on the grounds that the EU’s decision self-evidently distorts competition.

Greenpeace Energy is also calling on the German Government to join Austria in its formal complaint, but that’s still unlikely.

The nuclear dream crashes into harsh realities

But you know what – regardless of what happens with those legal challenges, it looks like the beginning of the end for Hinkley anyway. And here’s why:

  • The cost of the Hinkley Point project has gone up and up over the last two years, and shows little indication of stabilising where it now is;
  • The calamitous failure of EdF (and its partner Areva) to deliver the first two EPR projects at Olkiluoto in Finland and Flamanville in France has dragged on and on;
    – The two Chinese co-investors (the China National Nuclear Corporation and China General Nuclear Power) have got more and more leery about the EPR reactor design;
  • The French Government has become more and more outspoken about its reluctance to go on bailing out either EdF or Areva, as their balance sheets go from bad to worse;
  • Areva is now in such a bad state (with a €4.8bn loss in 2014) that it looks as if it might have to withdraw as a co-investor in the Hinkley project – a state of affairs pretty much confirmed by EdF’s CEO last week;
  • Worse yet, Areva has announced that it wants to suspend indefinitely any further work on the approval process for its EPR (the same reactor design as Hinkley) in the USA, which sends a pretty strong signal that the EPR in the USA is as good as dead and buried;
  • To cap it all, the UK Government has itself further muddied the waters by seeking approval from the EU to hold a ‘golden share’ in the Hinkley project. This would give them special voting rights, and could theoretically allow Ministers to block the transfer of ownership of Hinkley if EdF decided that it wanted to get out. (Worried about the Chinese taking total control, perhaps?!) Experts believe this may completely undo the case that the UK Government made to the Commission last year for approval of those huge subsidies.

And in the meantime, it has to be said that the world looks very different from the point of view of renewable energy. The costs of solar and wind continue to fall, year on year, with every indication that there’s a further 40% reduction to come over the next few years.

Hinkley has become toxic

So perhaps it’s not so surprising that the Coalition Government has been a lot quieter on its Hinkley hopes and dreams than it was last year. Not a peep, for instance, from the disgracefully compromised Liberal Democrat Secretary of State for Energy, Ed Davey. And not a peep from George Osborne, who must be looking at the finances of Hinkley Point with increasing hostility.

Interestingly, nor have we heard anything like as much from today’s pro-nuclear greenies as we did before – including George Monbiot, Stephen Tindale, Mark Lynas and even Jim Lovelock.

From what I’ve heard (by way of reliable gossip, it has to be said, rather than hard-and-fast evidence!), they’ve all realised that their ability to enthuse people with their pro-nuclear illusions is being severely (if not entirely) undermined by the Hinkley Point fiasco.

The combination of EdF and Areva (both realistically bankrupt, were it not for funding from the French Government), Chinese investors (demanding copper-bottomed guarantees that they will be bailed out when Hinkley Point turns into another Olkiluoto or Flamanville), a reactor design (the EPR) that even the keenest of nuclear engineers have started to describe as “unbuildable”, and the threat of further, even more costly delays (there’s now no chance at all that any reactor at Hinkley Point will be generating any electricity before 2025), is quite simply toxic.

My best bet is that these pro-nuclear greenies now desperately need Hinkley Point to fail, so that their reputations will be sort-of salvaged – even as they start hyping the next instalment of their nuclear nonsense.

We got a very strong sense of that through the speech of another pro-nuclear, former greenie, Baroness Worthington, Shadow Spokesperson for Energy and Climate Change in the House of Lords. In her words, the Hinkley Point deal has caused “a crisis of confidence” in the future of energy policy in the UK:

“policies which Conservatives brought in have resulted in a massive destabilisation of the energy market. Intervention in the market has dented confidence for a contract which has yet to be signed. We have become over-obsessed with the delivery of one project.”

And this from one of the keenest advocates of nuclear power in the Labour Party! No doubt her voice has been influential in the current Labour Party position on Hinkley, which is to argue that it needs a completely new financial appraisal, effectively giving the Labour Party a ‘get-out-of-Hinkley Point’ post-Election option.

When in a hole, stop digging. Tom Greatrex, take note!

Which is by no means the same thing, sadly, as Labour developing a ‘get-out-of-nuclear-altogether’ option. The Labour Party’s deeply unimpressive Energy Spokesman, Tom Greatrex, recently told voters in Scotland that a future Labour Government would force Scotland to be part of a new UK-wide nuclear programme – regardless of the SNP’s very clear anti-nuclear stance. (Go for it, Tom: what better way of winning back Labour voters in Scotland!)

All this chaos and confusion must surely mean that, post Election, we might at last be able to get back to a serious debate about energy policy here in the UK, without Hinkley Point distorting every single aspect of today’s Electricity Market Reform, shadowing out every single policy alternative, and holding back the mindset and behavioural revolutions amongst both business and the general public on which our energy future really depends.

We’ve already paid a very significant price for Labour’s sad surrender to the seductive lies of the nuclear industry, and for this Coalition Government’s near-incomprehensible decision to pursue the EPR reactor design for Hinkley Point. Between them, they’ve dug a hole already so deep that they have no idea what to do other than to keep on digging.

So let’s just hope that those Austrians stick to their guns with their legal challenge, for this is by far the longest and by far the most robust rope-ladder up which those benighted politicians – and ever-more benighted pro-nuclear greenies – will soon – ever so thankfully – be able to climb.

 

 

Jonathon Porritt is Founder Director of Forum for the Future www.forumforthefuture.org. His latest book, ‘The World We Made‘ is available from www.phaidon.com/store.

This article was originally published on Jonathon Porritt’s blog.

 

 




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Greenpeace Energy to launch legal challenge to UK nuclear subsidies Updated for 2026

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German green power supply company Greenpeace Energy (GPE) will take legal action against the European Commission because it has approved State aid worth billions for the building of the UK’s new Hinkley Point C nuclear plant.

According to GPE, the nuclear subsidy “threatens to distort competition in the European Union against genuine clean energy” and “could act as precedent and further undermine the EU energy market.”

“Highly subsidised nuclear power from this plant will noticeably distort European competitiveness. It will have an effect on prices at the power exchange in Germany as well”, says Sönke Tangermann, GPE’s managing director.

“This effect will have economic disadvantages for committed green power providers like us, and that’s why we are going to court.”

He adds that GPE will file a plea for annulment at the European Court of Justice in Luxembourg “as soon as the Commission’s State aid approval is published in the EU’s Official Journal and the period prescribed for bringing an action begins.”

Austria is also expected to launch a legal action against the Hinkley C subsidies – in the face of menacing threats from UK diplomats that the UK would “embrace any future opportunity that arises to sue or damage Austria in areas which have strong domestic political implications.”

Far higher subsidies to nuclear than to renewables

Last October the EU Commission approved State aid for the new build of two nuclear reactors at Hinkley Point in Somerset. GPE estimates that the immediate subsidy is worth about €22 billion, or £16 billion.

However the picture is complex as the aid package includes an inflation-proof generation subsidy of £92.50 per MWh for 35 years, construction guarantees, limits on liability for decommissioning, and a low accident liabilty cut-off. Other analysts believe the true cost as far higher and could amount to £30 billion or more.

The generation subsidy alone guarantees Hinkley’s power a wholesale price of £92.50 per MHh, double the market price, or 9.25p per unit – equivalent to almost 13€c. Adding all the elements together, says GPE, “The resulting subsidy is far higher than that for wind or solar power in Germany.”

It’s also much higher than renewable energy subsidies in the UK. Last week the UK government awarded contracts to renewable energy generators under its new ‘contracts for difference’ (CFD) auction. Typically wind generators were bidding £82.50 per MHh, and solar generators came in even lower, at £79.23 per MWh and £50 per MWh.

Also the contracts are for only 15 years – as opposed to the 35 years for Hinkley C – and contain no additional support or guarantees. The entire CFD package for new renewable energy capacity is limited to just £50 million per year, rising to £65 million in future years.

As reported on The Ecologist, the effect of the UK’s energy policy will be to almost kill off the flourishing solar sector, reducing the rate of new solar build from 2,000-3,000 MWh per year, to an estimated 32MW.

Many critics believe that the government is cutting back on renewables that are increasingly competitive against fossil fuels as prices rapidly drop, to make way for far higher-priced nuclear power.

Hinkley threatens to distort the entire European market

An expert opinion commissioned by Greenpeace Energy from analysts Energy Brainpool shows that Hinkley Point C will lead to a shift in price levels in the European electricity market.

The opinion explains that lower prices for electricity at the power exchange in Germany will discriminate against those suppliers that procure green power at fixed prices directly from plant operators in the framework of the German Renewable Energies Act.

“Unlike the claims of Prime Minister Cameron, a new reactor built at Hinkley Point, supported by billions of taxpayers money, is not a purely British affair, but directly disadvantages us as a German enterprise active in the European electricity market”, says Tangermann.

Due to the price effects of Hinkley Point C, the costs of the system laid out in Germany’s Renewable Energies Act (EEG) to foster renewables are likely to rise because the operators of renewable energy plants – with fixed feed-in tariffs – would in future have to be paid a larger difference in the electricity price at the power exchange.

This would probably cause a small increase in the renewable energy surcharge, while “the strain it would put on the EEG system is an outrage”, says Tangermann.

Will Hinkley corner European Investment Funds?

GPE’s other fear is that Hinkley, and other nuclear projects elsewhere in Europe, could grab a huge share of the European Investment Fund presented by Jean-Claude Juncker, president of the EU Commission, when it enters into force.

The UK has already applied for €46 billion to fund Hinkley C and two other nuclear power stations from the projected €315 billion fund, and this could be essential as other potential funders have withdrawn. Poland is also applying for €12 billion for new nuclear build.

Moreover, the EU intends to massively extend cross-border power lines, meaning the negative effect of this development, as calculated by Energy Brainpool, would be reinforced on a massive scale.As such GPE sees in the approval of State aid for Hinkley Point C a precedent for other nuclear projects that will hugely distort Europe’s energy market, says Tangemann:

“If the Commission’s approval goes unchallenged, then Hinkley Point C is just the tip of the iceberg, which is why we are calling on the German government to take legal action against the unfair State aid approval for Hinkley Point C. It must not open the door to other hazardous and absurdly expensive nuclear power projects in Europe.”

Germany’s biggest independent energy co-op

GPE is Germany’s largest national, independent energy cooperative, supplying clean power to more than 111,000 customers, of which about 9,000 are businesses. It is organised as a cooperative with 23,000 members whose contributions provide a solid equity capital base.

Through its subsidiary Planet Energy it also builds its own power plants, and has 11 wind farms (see photo) and three photovoltaic plants totalling 65MW are already in operation.

GPE has appointed Dr. Dörte Fouquet at the Becker Büttner Held law office, specialists in this area, to prepare the application for the plea for annulment and assist in subsequent proceedings.

In coming weeks, Greenpeace Energy will also review the possibility of joining forces with other stakeholders in Germany’s energy market for bringing legal action as a collective.

 

 

Principal source: Greenpeace Energy.

Oliver Tickell edits The Ecologist.

 




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UK threatens Austria over Hinkley C legal challenge Updated for 2026

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The UK Government is planning a suite of retaliations against Austria if it pursues its planned challenge in the European Court of Justice to the Hinkley Point C nuclear plant, according to a leaked document published by Greenpeace UK’s Energydesk.

In the leaked memo, sent from the Austrian Embassy in London to the Austrian government, a senior international diplomat warns:

“The UK has obviously started systematically elaborating countermeasures that could be harmful to Austria … Further steps and escalation ensuing the complaint are not to be ruled out.”

“The new Europe Director at the Foreign and Commonwealth Office, Vijay Rangarajan made clear that the Austrian plans to bring forth a complaint related to the EU State Aid Rules at the European Court of Justice (ECJ) has already shown a negative impact on the bilateral relations.”

There is a “strength of feeling” that goes “all the way up to PM Cameron”, it adds, “and the Prime Minister has instructed all the responsible members of government to call their Austrian counterparts.”

‘We will cause maximum damage to Austria’s interests’

According to the document, Rangarajan also made it clear that the UK would “embrace any future opportunity that arises to sue or damage Austria in areas which have strong domestic political implications.” Three specific points that are envisaged as first steps:

  • “A complaint before the ECJ against the labelling of electricity sources of the power provided by electricity suppliers, since, according to the British point of view, this violates the internal market rules.”
  • “An investigation of whether the Austrian complaint violates the Euratom Treaty.”
  • “Exertion of pressure for Austria – if it is not willing to recognise nuclear power as a sustainable energy source – to bear a greater share in the EU-internal effort sharing” on climate change.

On the face of it is hard to see how providing energy users with information on the source of the electricity they use would violate internal market rules, but as Greenpeace’s Christine Ottery explains: “As nuclear is so unpopular in Austria this in could effect mean Austria would go nuclear free.”

Faced with this onslaught of threats, the un-named Austrian diplomat insisted that “Austria was not under any circumstances interfering with the UK’s sovereign right to choose its own energy mix.”

Rather, they said, “the present case concerns a state aid-related complaint given that the Contract for Difference approved by the EC violates EU State Aid rules. It would be in the interest of rule of law principles that such a decision of the EC be appealed before the ECJ.”

The diplomat also “referred to the consensus of the Federal Government on the issue and to the respective resolution which was passed by parliament.”

Legal challenge imminent

Austria has made no secret of its intention to take legal action over the EU’s decision to allow £17.6bn of subsidies for two Hinkley C nuclear reactors under the bloc’s State Aid (competition) rules, and the legal papers are expected to be filed imminently.

The Hinkley C reactors are projected to provide 7% of the UK’s electricity by 2023 but Austria’s appeal could delay the UK government’s final investment decision by more than two years.

The news of the UK’s countermeasures coincides with the news that the final decision on the project will be delayed until months after the UK general election due to concerns from the projects’ Chinese backers about the creditworthiness of Areva, one of the partner companies involved in the Hinkley C project.

In a surprise decision, the European Commission decided to give the stamp of approval to the UK government’s massive subsidies for Hinkley’s new reactors in October last year.

The 35-year Hinkley subsidy deal, under Contracts of Difference, has been criticised for being poor value for money for UK bill payers with much of the money going to French and Chinese state-owned energy firms.

The subsidy is worth £17.6bn on paper, but a Greenpeace analysis put the total (undiscounted) subsidy to Hinkley over its lifetime as much higher at £37bn – working out as a £14 increase per household per year.

Austrian Chancellor (equivalent to prime minister) Werner Faymann came out against the European Commission approval of the Hinkley subsidy deal, saying: “Alternative forms of energy are worthy of subsidies, not nuclear energy.”

As for the efficacy of the UK’s threats, Fayman said last week that he will not back down over the legal action as nuclear is not “not an eligible new technology” eligible for State Aid, according to the Austrian newspaper Kronen Zeitung.

 

 

Principal source: Greenpeace EnergyDesk: ‘Energy Files: UK government threatens to strike back over Austria’s Hinkley legal challenge‘.

 




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Running in reverse: the world’s ‘nuclear power renaissance’ Updated for 2026

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The UK’s planned Hinkley C nuclear plant is looking increasingly like a dead duck – or possibly parrot.

As the Financial Times reports today, Parliament’s Public Accounts Committee has abandoned plans to examine the ‘value of money’ Hinkley C offers taxpayers – because no deal has been reached and none is expected before the general election in May.

In other words, all that bullish talk about Hinkley C launching Britain’s ‘nuclear renaissance’ has melted away like a spring frost in the morning sun.

There is no deal on the table for the PAC to examine – indeed it’s looking increasingly as if there may never be a deal, in spite of the astonishingly generous £30 billion support package on offer, at the expense of UK taxpayers and energy users.

Only last week Austria confirmed that it will launch a legal action against the Hinkley C support package, on the grounds that it constitutes illegal state aid. The action looks likely to succeed – and even if it doesn’t, it’s predicted to ensure at least four years of delay.

The nuclear slump has gone global!

But it’s not just in the UK that the ‘nuclear renaissance has hit the rocks. Global nuclear power capacity remained stagnant in 2014 according to the World Nuclear Association:

  • Five new reactors began supplying electricity and three were permanently shut down.
  • There are now 437 ‘operable’ reactors compared with 435 reactors a year ago. Thus the number of reactors increased by two (0.5%) and nuclear generating capacity increased by 2.4 gigawatts (GW) or 0.6%. (For comparison, around 100 GW of solar and wind power capacity were built in 2014, up from 74 GW in 2013.)
  • Construction started on just three reactors during 2014. A total of 70 reactors (74 GW) are under construction.

Thus a long-standing pattern of stagnation continues. In the two decades from 1995-2014, the number of power reactors leapt from 436 to 437.

Ten years ago, the rhetoric about a nuclear power renaissance was in full swing. In those ten years, the number of reactors has fallen from 443 to 437. But despite 20 years of stagnation, the World Nuclear Association remains upbeat. Its latest report, The World Nuclear Supply Chain: Outlook 2030, envisages the start-up of 266 new reactors by 2030.

The figure is implausible – it piles heroic assumptions upon heroic assumptions. If only the World Nuclear Association would take bets on its ridiculous projections, which are always proven to be wrong. Nuclear Energy Insider is a more sober and reflective in an end-of-year review published in December:

“As we embark on a new year, there are distinct challenges and opportunities on the horizon for the nuclear power industry. Many industry experts believe that technology like Small Nuclear Reactors (SMR) represent a strong future for nuclear.

“Yet, rapidly growing renewable energy sources, a bountiful and inexpensive supply of natural gas and oil, and the aging population of existing nuclear power plants represent challenges that the industry must address moving forward.”

Nuclear power’s ever shrinking share of global power generation

Steve Kidd, a nuclear consultant who worked for the World Nuclear Association for 17 years, is still more downbeat:

“Even with rapid nuclear growth in China, nuclear’s share in world electricity is declining. The industry is doing little more than hoping that politicians and financiers eventually see sense and back huge nuclear building programmes. On current trends, this is looking more and more unlikely.

“The high and rising nuclear share in climate-friendly scenarios is false hope, with little in the real outlook giving them any substance. Far more likely is the situation posited in the World Nuclear Industry Status Report …

“Although this report is produced by anti-nuclear activists, its picture of the current reactors gradually shutting down with numbers of new reactors failing to replace them has more than an element of truth given the recent trends.”

Kidd proposes reducing nuclear costs by simplifying and standardising current reactor designs.

Meanwhile, as the International Energy Agency’s World Economic Outlook 2014 report noted, nuclear growth will be “concentrated in markets where electricity is supplied at regulated prices, utilities have state backing or governments act to facilitate private investment.”

Conversely, “nuclear power faces major challenges in competitive markets where there are significant market and regulatory risks, and public acceptance remains a critical issue worldwide.”

Four countries supposedly driving a nuclear renaissance

Let’s briefly consider countries where the number of power reactors might increase or decrease by ten or more over the next 15-20 years. Generally, it is striking how much uncertainty there is about the nuclear programs in these countries.

China is one of the few exceptions. China has 22 operable reactors, 27 reactors under construction and 64 planned. Significant, rapid growth can be expected unless China’s nuclear program is derailed by a major accident or a serious act of sabotage or terrorism. But there are plenty of reasons to be concerned:

In the other three countries supposedly driving a nuclear renaissance – Russia, South Korea and India – growth is likely to be modest and slow.

Russia has 34 operating reactors and nine under construction. Just three reactors began operating in the past decade and the pattern of slow growth is likely to continue. As for Russia’s ambitious nuclear export program, Steve Kidd noted in October 2014 that it “is reasonable to suggest that it is highly unlikely that Russia will succeed in carrying out even half of the projects in which it claims to be closely involved”.

South Korea has 23 operating reactors, five under construction and eight planned. Earlier plans for rapid nuclear expansion in South Korea have been derailed by the Fukushima disaster, a major scandal over forged safety documents, and a hacking attack on Korea Hydro’s computer network.

India has 21 operating reactors, six under construction and 22 planned. But India’s nuclear program is in a “deep freeze” according to a November 2014 article in the Hindustan Times.

Likewise, India Today reported on January 8: “The Indian nuclear programme is on the brink of distress. For the past four years, no major tender has gone through – a period that was, ironically, supposed to mark the beginning of an Indian nuclear renaissance in the aftermath of the landmark India-US civil nuclear deal.”

A November 2014 article in The Hindu newspaper notes that three factors have put a break on India’s reactor-import plans: “the exorbitant price of French- and U.S.-origin reactors, the accident-liability issue, and grass-roots opposition to the planned multi-reactor complexes.”

In addition, unresolved disagreements regarding safeguards and non-proliferation assurances are delaying US and European investment in India’s nuclear program.

What about South Africa and Saudi Arabia?

Last year Saudi Araba announced plans to build 16 reactors by 2032. Already, the timeline has been pushed back from 2032 to 2040. As with any country embarking on a nuclear power program for the first time, Saudi Arabia faces daunting logistical and workforce issues.

Numerous nuclear supplier are lining up to supply Saudi Arabia’s nuclear power program but political obstacles could easily emerge, not least because Saudi officials (and royalty) have repeatedly said that the Kingdom will build nuclear weapons if Iran’s nuclear program is not constrained.

As for South Africa, its on-again off-again nuclear power program is on again with plans for 9.6 GW of nuclear capacity in addition to the two operating reactors at Koeberg. In 2007, state energy utility Eskom approved a plan for 20 GW of new nuclear capacity.

Areva’s EPR and Westinghouse’s AP1000 were short-listed and bids were submitted. But in 2008 Eskom announced that it would not proceed with either of the bids due to lack of finance.

Thus the latest plan for 9.6 GW of new nuclear capacity in South Africa is being treated with scepticism. As academic Professor Steve Thomas noted in a July 2014 report:

“Overall, a renewed call for tenders (or perhaps bilateral negotiations with a preferred bidder) is likely to produce the same result as 2008: a very high price for an unproven technology that will only be financeable if the South African public, either in the form of electricity consumers or as taxpayers, is prepared to give open ended guarantees.”

Nuclear negawatts in North America

Now to briefly consider those countries where a significant decline of nuclear power is possible or likely over the next 15-20 years, patterns of stagnation or slow decline in North America and western Europe can safely be predicted.

Steve Kidd wrote in May 2014 that uranium demand (and nuclear power capacity) “will almost certainly fall in the key markets in Western Europe and North America” in the period to 2030.

The United States has 99 operable reactors. Five reactors are under construction, “with little prospect for more” according to Oilprice.com. Decisions to shut down just as many reactors have been taken in the past few years.

As the Financial Times noted last year, two decisions that really rattled the industry were the closures of Dominion Resources’ Kewaunee plant in Wisconsin and Entergy’s Vermont Yankee – both were operating and licensed to keep operating into the 2030s, but became uneconomic to keep in operation.

The US Energy Information Administration estimated in April 2014 that 10.8 GW of nuclear capacity – around 10% of total US nuclear capacity – could be shut down by the end of the decade.

The most that the US nuclear industry can hope for is stagnation underpinned by new legislative and regulatory measures favouring nuclear power along with multi-billion dollar government handouts.

And in the EU …

In January 2014, the European Commission forecast that EU nuclear generating capacity of 131 GW in 2010 will decline to 97 GW in 2025, mirroring the situation in North America.

The UK is very much a case in point – the nuclear power industry there is scrambling just to stand still, and as noted above, looks increasingly likely to lose its Hinkley C mascot.

France is well known as Europe’s most nuclear country, and that’s likely to be the case for some time. But nuclear’s share of its power generation could be set for a sharp decline.

The country’s lower house of Parliament voted in October 2014 to cut nuclear’s share of electricity generation from 75% to 50% by 2025, to cap nuclear capacity at 63.2 GW, and to pursue a renewables target of 40% by 2030 with various new measures to promote the growth of renewables. The Senate will vote on the legislation early this year.

However there will be many twists and turns in French energy policy. Energy Minister Segolène Royal said on January 13 that France should build a new generation of reactors, and she noted that the October 2014 energy transition bill did not include a 40-year age limit for power reactors as ecologists wanted.

Meanwhile in Germany, the  government is systematically pursuing its policy of phasing out nuclear power by 2023. That said, nothing is certain: the nuclear phase-out policy of the social democrat / greens coalition government in the early 2000s was later overturned by a conservative government.

The Fukushima effect, and ageing reactors

Japan’s 48 operable reactors are all shut down. A reasonable estimate is that three-quarters (36/48) of the reactors will restart in the coming years.

Before the Fukushima disaster, Tokyo planned to add another 15-20 reactors to the fleet of 55 giving a total of 70-75 reactors. Thus Japan’s nuclear power industry will be around half the size it might have been if not for the Fukushima disaster.

Part of Japan’s problem is that of ageing reactors, with many that it will simply be too expensive to bring up to current safety standards. The topic came into global focus in 2014 – and will remain in focus for decades to come with the average age of the world’s power reactors now 29 years and steadily increasing.

Problems with ageing reactors include:

  • an increased risk of accidents (and associated problems such as generally inadequate accident liability arrangements);
  • an increased rate of unplanned reactors outages (at one point last year, less than half of the UK’s nuclear capacity was available due to multiple outages);
  • costly refurbishments;
  • debates over appropriate safety standards for reactors designed decades ago; and
  • the uncertainties and costs associated with reactor decommissioning and long-term nuclear waste management.

Greenpeace highlighted the problems associated with ageing reactors with the release of a detailed report last year, and emphasised the point by breaking into six ageing European nuclear plants on 5 March 2014.

The International Energy Agency (IEA) said in its World Energy Outlook 2014 report: “A wave of retirements of ageing nuclear reactors is approaching: almost 200 of the 434 reactors operating at the end of 2013 are retired in the period to 2040, with the vast majority in the European Union, the United States, Russia and Japan.”

A growing problem – underfunded nuclear decommissioning

IEA chief economist Fatih Birol said: “Worldwide, we do not have much experience and I am afraid we are not well-prepared in terms of policies and funds which are devoted to decommissioning. A major concern for all of us is how we are going to deal with this massive surge in retirements in nuclear power plants.”

The World Energy Outlook 2014 report estimates the cost of decommissioning reactors to be more than US$100 billion up to 2040. The IEA’s head of power generation analysis, Marco Baroni, said that even excluding waste disposal costs, the final cost could be as much as twice as high as the $100 billion estimate, and that decommissioning costs per reactor can vary by a factor of four.

Baroni said the issue was not the decommissioning cost per reactor but “whether enough funds have been set aside to provide for it.” Evidence of inadequate decommissioning funds is mounting.

To give just one example, Entergy estimates a cost of US$1.24 billion to decommission Vermont Yankee, but the company’s decommissioning trust fund for the plant – US$ 670 million – is barely half that amount. As Michael Mariotte, President of the US Nuclear Information & Resource Service, noted in a recent article:

“Entergy, for example, has only about half the needed money in its decommissioning fund (and even so still found it cheaper to close the reactor than keep it running); repeat that across the country with multiple and larger reactors and the shortfalls could be stunning. Expect heated battles in the coming years as nuclear utilities try to push the costs of the decommissioning fund shortfalls onto ratepayers.”

The nuclear industry has a simple solution to the problem of old reactors: new reactors. But the battles over ageing and decommissioned reactors – and the raiding of taxpayers’ pockets to cover shortfalls – will make it that much more difficult to convince politicians and the public to support new reactors.

 

 

This article is reprinted from Nuclear Monitor #797, January 2015, with updates by The Ecologist.

Dr Jim Green is the national nuclear campaigner with Friends of the Earth Australia and editor of the Nuclear Monitor newsletter. Nuclear Monitor is published 20 times a year. It has been publishing deeply researched, often strongly critical articles on all aspects of the nuclear cycle since 1978. A must-read for all those who work on this issue!

 

 




389671

Running in reverse: the world’s ‘nuclear power renaissance’ Updated for 2026

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The UK’s planned Hinkley C nuclear plant is looking increasingly like a dead duck – or possibly parrot.

As the Financial Times reports today, Parliament’s Public Accounts Committee has abandoned plans to examine the ‘value of money’ Hinkley C offers taxpayers – because no deal has been reached and none is expected before the general election in May.

In other words, all that bullish talk about Hinkley C launching Britain’s ‘nuclear renaissance’ has melted away like a spring frost in the morning sun.

There is no deal on the table for the PAC to examine – indeed it’s looking increasingly as if there may never be a deal, in spite of the astonishingly generous £30 billion support package on offer, at the expense of UK taxpayers and energy users.

Only last week Austria confirmed that it will launch a legal action against the Hinkley C support package, on the grounds that it constitutes illegal state aid. The action looks likely to succeed – and even if it doesn’t, it’s predicted to ensure at least four years of delay.

The nuclear slump has gone global!

But it’s not just in the UK that the ‘nuclear renaissance has hit the rocks. Global nuclear power capacity remained stagnant in 2014 according to the World Nuclear Association:

  • Five new reactors began supplying electricity and three were permanently shut down.
  • There are now 437 ‘operable’ reactors compared with 435 reactors a year ago. Thus the number of reactors increased by two (0.5%) and nuclear generating capacity increased by 2.4 gigawatts (GW) or 0.6%. (For comparison, around 100 GW of solar and wind power capacity were built in 2014, up from 74 GW in 2013.)
  • Construction started on just three reactors during 2014. A total of 70 reactors (74 GW) are under construction.

Thus a long-standing pattern of stagnation continues. In the two decades from 1995-2014, the number of power reactors leapt from 436 to 437.

Ten years ago, the rhetoric about a nuclear power renaissance was in full swing. In those ten years, the number of reactors has fallen from 443 to 437. But despite 20 years of stagnation, the World Nuclear Association remains upbeat. Its latest report, The World Nuclear Supply Chain: Outlook 2030, envisages the start-up of 266 new reactors by 2030.

The figure is implausible – it piles heroic assumptions upon heroic assumptions. If only the World Nuclear Association would take bets on its ridiculous projections, which are always proven to be wrong. Nuclear Energy Insider is a more sober and reflective in an end-of-year review published in December:

“As we embark on a new year, there are distinct challenges and opportunities on the horizon for the nuclear power industry. Many industry experts believe that technology like Small Nuclear Reactors (SMR) represent a strong future for nuclear.

“Yet, rapidly growing renewable energy sources, a bountiful and inexpensive supply of natural gas and oil, and the aging population of existing nuclear power plants represent challenges that the industry must address moving forward.”

Nuclear power’s ever shrinking share of global power generation

Steve Kidd, a nuclear consultant who worked for the World Nuclear Association for 17 years, is still more downbeat:

“Even with rapid nuclear growth in China, nuclear’s share in world electricity is declining. The industry is doing little more than hoping that politicians and financiers eventually see sense and back huge nuclear building programmes. On current trends, this is looking more and more unlikely.

“The high and rising nuclear share in climate-friendly scenarios is false hope, with little in the real outlook giving them any substance. Far more likely is the situation posited in the World Nuclear Industry Status Report …

“Although this report is produced by anti-nuclear activists, its picture of the current reactors gradually shutting down with numbers of new reactors failing to replace them has more than an element of truth given the recent trends.”

Kidd proposes reducing nuclear costs by simplifying and standardising current reactor designs.

Meanwhile, as the International Energy Agency’s World Economic Outlook 2014 report noted, nuclear growth will be “concentrated in markets where electricity is supplied at regulated prices, utilities have state backing or governments act to facilitate private investment.”

Conversely, “nuclear power faces major challenges in competitive markets where there are significant market and regulatory risks, and public acceptance remains a critical issue worldwide.”

Four countries supposedly driving a nuclear renaissance

Let’s briefly consider countries where the number of power reactors might increase or decrease by ten or more over the next 15-20 years. Generally, it is striking how much uncertainty there is about the nuclear programs in these countries.

China is one of the few exceptions. China has 22 operable reactors, 27 reactors under construction and 64 planned. Significant, rapid growth can be expected unless China’s nuclear program is derailed by a major accident or a serious act of sabotage or terrorism. But there are plenty of reasons to be concerned:

In the other three countries supposedly driving a nuclear renaissance – Russia, South Korea and India – growth is likely to be modest and slow.

Russia has 34 operating reactors and nine under construction. Just three reactors began operating in the past decade and the pattern of slow growth is likely to continue. As for Russia’s ambitious nuclear export program, Steve Kidd noted in October 2014 that it “is reasonable to suggest that it is highly unlikely that Russia will succeed in carrying out even half of the projects in which it claims to be closely involved”.

South Korea has 23 operating reactors, five under construction and eight planned. Earlier plans for rapid nuclear expansion in South Korea have been derailed by the Fukushima disaster, a major scandal over forged safety documents, and a hacking attack on Korea Hydro’s computer network.

India has 21 operating reactors, six under construction and 22 planned. But India’s nuclear program is in a “deep freeze” according to a November 2014 article in the Hindustan Times.

Likewise, India Today reported on January 8: “The Indian nuclear programme is on the brink of distress. For the past four years, no major tender has gone through – a period that was, ironically, supposed to mark the beginning of an Indian nuclear renaissance in the aftermath of the landmark India-US civil nuclear deal.”

A November 2014 article in The Hindu newspaper notes that three factors have put a break on India’s reactor-import plans: “the exorbitant price of French- and U.S.-origin reactors, the accident-liability issue, and grass-roots opposition to the planned multi-reactor complexes.”

In addition, unresolved disagreements regarding safeguards and non-proliferation assurances are delaying US and European investment in India’s nuclear program.

What about South Africa and Saudi Arabia?

Last year Saudi Araba announced plans to build 16 reactors by 2032. Already, the timeline has been pushed back from 2032 to 2040. As with any country embarking on a nuclear power program for the first time, Saudi Arabia faces daunting logistical and workforce issues.

Numerous nuclear supplier are lining up to supply Saudi Arabia’s nuclear power program but political obstacles could easily emerge, not least because Saudi officials (and royalty) have repeatedly said that the Kingdom will build nuclear weapons if Iran’s nuclear program is not constrained.

As for South Africa, its on-again off-again nuclear power program is on again with plans for 9.6 GW of nuclear capacity in addition to the two operating reactors at Koeberg. In 2007, state energy utility Eskom approved a plan for 20 GW of new nuclear capacity.

Areva’s EPR and Westinghouse’s AP1000 were short-listed and bids were submitted. But in 2008 Eskom announced that it would not proceed with either of the bids due to lack of finance.

Thus the latest plan for 9.6 GW of new nuclear capacity in South Africa is being treated with scepticism. As academic Professor Steve Thomas noted in a July 2014 report:

“Overall, a renewed call for tenders (or perhaps bilateral negotiations with a preferred bidder) is likely to produce the same result as 2008: a very high price for an unproven technology that will only be financeable if the South African public, either in the form of electricity consumers or as taxpayers, is prepared to give open ended guarantees.”

Nuclear negawatts in North America

Now to briefly consider those countries where a significant decline of nuclear power is possible or likely over the next 15-20 years, patterns of stagnation or slow decline in North America and western Europe can safely be predicted.

Steve Kidd wrote in May 2014 that uranium demand (and nuclear power capacity) “will almost certainly fall in the key markets in Western Europe and North America” in the period to 2030.

The United States has 99 operable reactors. Five reactors are under construction, “with little prospect for more” according to Oilprice.com. Decisions to shut down just as many reactors have been taken in the past few years.

As the Financial Times noted last year, two decisions that really rattled the industry were the closures of Dominion Resources’ Kewaunee plant in Wisconsin and Entergy’s Vermont Yankee – both were operating and licensed to keep operating into the 2030s, but became uneconomic to keep in operation.

The US Energy Information Administration estimated in April 2014 that 10.8 GW of nuclear capacity – around 10% of total US nuclear capacity – could be shut down by the end of the decade.

The most that the US nuclear industry can hope for is stagnation underpinned by new legislative and regulatory measures favouring nuclear power along with multi-billion dollar government handouts.

And in the EU …

In January 2014, the European Commission forecast that EU nuclear generating capacity of 131 GW in 2010 will decline to 97 GW in 2025, mirroring the situation in North America.

The UK is very much a case in point – the nuclear power industry there is scrambling just to stand still, and as noted above, looks increasingly likely to lose its Hinkley C mascot.

France is well known as Europe’s most nuclear country, and that’s likely to be the case for some time. But nuclear’s share of its power generation could be set for a sharp decline.

The country’s lower house of Parliament voted in October 2014 to cut nuclear’s share of electricity generation from 75% to 50% by 2025, to cap nuclear capacity at 63.2 GW, and to pursue a renewables target of 40% by 2030 with various new measures to promote the growth of renewables. The Senate will vote on the legislation early this year.

However there will be many twists and turns in French energy policy. Energy Minister Segolène Royal said on January 13 that France should build a new generation of reactors, and she noted that the October 2014 energy transition bill did not include a 40-year age limit for power reactors as ecologists wanted.

Meanwhile in Germany, the  government is systematically pursuing its policy of phasing out nuclear power by 2023. That said, nothing is certain: the nuclear phase-out policy of the social democrat / greens coalition government in the early 2000s was later overturned by a conservative government.

The Fukushima effect, and ageing reactors

Japan’s 48 operable reactors are all shut down. A reasonable estimate is that three-quarters (36/48) of the reactors will restart in the coming years.

Before the Fukushima disaster, Tokyo planned to add another 15-20 reactors to the fleet of 55 giving a total of 70-75 reactors. Thus Japan’s nuclear power industry will be around half the size it might have been if not for the Fukushima disaster.

Part of Japan’s problem is that of ageing reactors, with many that it will simply be too expensive to bring up to current safety standards. The topic came into global focus in 2014 – and will remain in focus for decades to come with the average age of the world’s power reactors now 29 years and steadily increasing.

Problems with ageing reactors include:

  • an increased risk of accidents (and associated problems such as generally inadequate accident liability arrangements);
  • an increased rate of unplanned reactors outages (at one point last year, less than half of the UK’s nuclear capacity was available due to multiple outages);
  • costly refurbishments;
  • debates over appropriate safety standards for reactors designed decades ago; and
  • the uncertainties and costs associated with reactor decommissioning and long-term nuclear waste management.

Greenpeace highlighted the problems associated with ageing reactors with the release of a detailed report last year, and emphasised the point by breaking into six ageing European nuclear plants on 5 March 2014.

The International Energy Agency (IEA) said in its World Energy Outlook 2014 report: “A wave of retirements of ageing nuclear reactors is approaching: almost 200 of the 434 reactors operating at the end of 2013 are retired in the period to 2040, with the vast majority in the European Union, the United States, Russia and Japan.”

A growing problem – underfunded nuclear decommissioning

IEA chief economist Fatih Birol said: “Worldwide, we do not have much experience and I am afraid we are not well-prepared in terms of policies and funds which are devoted to decommissioning. A major concern for all of us is how we are going to deal with this massive surge in retirements in nuclear power plants.”

The World Energy Outlook 2014 report estimates the cost of decommissioning reactors to be more than US$100 billion up to 2040. The IEA’s head of power generation analysis, Marco Baroni, said that even excluding waste disposal costs, the final cost could be as much as twice as high as the $100 billion estimate, and that decommissioning costs per reactor can vary by a factor of four.

Baroni said the issue was not the decommissioning cost per reactor but “whether enough funds have been set aside to provide for it.” Evidence of inadequate decommissioning funds is mounting.

To give just one example, Entergy estimates a cost of US$1.24 billion to decommission Vermont Yankee, but the company’s decommissioning trust fund for the plant – US$ 670 million – is barely half that amount. As Michael Mariotte, President of the US Nuclear Information & Resource Service, noted in a recent article:

“Entergy, for example, has only about half the needed money in its decommissioning fund (and even so still found it cheaper to close the reactor than keep it running); repeat that across the country with multiple and larger reactors and the shortfalls could be stunning. Expect heated battles in the coming years as nuclear utilities try to push the costs of the decommissioning fund shortfalls onto ratepayers.”

The nuclear industry has a simple solution to the problem of old reactors: new reactors. But the battles over ageing and decommissioned reactors – and the raiding of taxpayers’ pockets to cover shortfalls – will make it that much more difficult to convince politicians and the public to support new reactors.

 

 

This article is reprinted from Nuclear Monitor #797, January 2015, with updates by The Ecologist.

Dr Jim Green is the national nuclear campaigner with Friends of the Earth Australia and editor of the Nuclear Monitor newsletter. Nuclear Monitor is published 20 times a year. It has been publishing deeply researched, often strongly critical articles on all aspects of the nuclear cycle since 1978. A must-read for all those who work on this issue!

 

 




389671

Austria: ‘we will launch Hinkley C nuclear subsidy legal challenge by April’ Updated for 2026

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Austria is to launch a legal challenge against the European Union’s (EU) decision to allow billions of pounds of subsidies for Hinkley Point C, casting fresh doubt over the UK’s first planned nuclear reactors in 20 years.

In October, the EU approved the controversial £17.6bn subsidy deal for the power station, which is expected to provide 7% of the UK’s electricity by 2023.

David Cameron had previously hailed the subsidy deal between the French state-owned EDF and the UK government as “a very big day for our country”. He also described the signing of the Hinkley deal as marking “the next generation of nuclear power in Britain“, for its ability to meet energy demand and contribute to long-term security of supply.

But the appeal by Austria, a non-nuclear nation, will be launched by April and could delay a final investment decision by the UK government for over two years.

The Guardian understands that Luxembourg is very likely to support the case in the European Court of Justice, arguing that the UK’s loan guarantees – over a 35-year period – constitute illegal state aid. Another EU country may follow suit.

“There has been a high-level decision by our Chancellor and Vice Chancellor to challenge the EU decision on Hinkley within two months of its publication in the EU’s official journal”, said Andreas Molin, the director of Austria’s environment ministry. The journal’s publication is expected in the next fortnight.

Stefan Pehringer, a foreign policy adviser to the Austrian federal chancellory said: “The Austrian government has announced its readiness to appeal against the EC’s [European Commission] decision concerning state aid for the Hinkley Point project, as it does not consider nuclear power to be a sustainable form of technology – neither in environmental nor in economic terms.”

Can Hinkley survive the 2015 election?

Work has already begun at the Hinkley site, which the UK government said will have a capacity of 3.3GW, with the electricity it generates bought at a strike-price of £92.50 per megawatt hour, around double the market rate.

EDF had planned to sign a long-awaited funding agreement with its Chinese investment partners in March, thought to be key to settling procurement plans for the £24.5bn build, and the precursor to a final investment decision.

But the lawsuit may delay such plans, and introduce uncertainty about the UK’s attitude towards Hinkley after elections in May.

The Austrian government’s analysis suggests that European court cases of this nature typically last for one and a half years. But “as this is going to be a more complicated and fundamental case, it will last a little bit longer”, Molin said. “Two years could be a rough guess.”

He added: “If you accept the argument that Hinkley constitutes a ‘market failure’ as put forward by the Commission, you could apply it to all other means of electricity production, probably all other forms of energy conversion, and it might even apply beyond the energy sector. We think that the single energy market itself is at stake in this case.”

The Commission’s hurried and paradoxical decision

The EU’s original decision last year surprised many observers, as the then-competition commissioner Joaquín Almunia had previously expressed scepticism about Hinkley’s’ conformity with an exhaustive list of strict state aid criteria.

These govern proportionality, decarbonisation, the potential for market distortion, the definition of ‘market failures’ and, crucially, whether the public monies advance an “objective of common interest” for the bloc.

No grounds for the Commission’s volte-face have yet been published, but the Guardian has seen a draft of the EU decision from last October, suggesting that one key decider had been advised that Hinkley advanced an EU ‘common interest’ around security of supply.

A Commission investigation declared itself “unsure” whether the reactor would resolve the UK’s security of supply issues, and was unconvinced that ‘diversification’ of supplies, on its own, would justify the monies involved.

“The Commission however accepted that the decision was in line with the Euratom treaty”, the draft ruling says. The Euratom treaty obliges member states to facilitate investments in nuclear power and encourage ventures that lead to the technology’s development.

Molin said that Austria would argue that the Euratom treaty could not be used in this way in state aid cases, but there would be other lines of dispute. “We will try to prove that the commission did not consider all the things which it should have considered and that there were some procedural flaws”, he said.

Minutes from the Commission’s internal discussion of the issue show that the EC’s president at the time, José Manuel Barroso, viewed the Hinkley decision as unprecedented, and said that it “touched on a politically sensitive topic”.

No contract for the Hinkley plant was put out to tender, and the ruling sparked outrage among environmentalists in the EU, that shows no signs of dying down.

“The Commission took a political decision disguised as a legal one”, said Mark Johnston, a senior adviser to the European Policy Centre. “Barroso thought it would be easier to bend over for Cameron than to defend the single energy market. The significance of the case for energy investments across Europe could not be greater.”

A ‘fatal blow’, claim the Greens

Molly Scott Cato, the Green Party MEP for the South West region, which includes Hinkley, said: “I think that this court case is certainly going to delay the signing and also the construction of Hinkley.”

“As one of the government’s main arguments for Hinkley was that it would solve the ‘energy gap’ before renewables could be brought onstream, it is a fatal blow to Hinkley as part of a future energy strategy for the UK.”

Natalie Bennett, the leader of the Green Party, said that such claims now seemed risible. “I think we have seen the final generation of nuclear power, I am very pleased to say. It’s gone, it’s dusted. Lets focus on evidence-based renewables and energy conservation futures.”

But the UKIP MEP and energy spokesman, Roger Helmer, offered strong support for nuclear energy, qualified only by a caveat that the government’s Hinkley deal had been “excessively expensive” because of regulatory uncertainty from Brussels.

“Given that Hinkley is a trailblazer for the new generation of nuclear and now looks like being held up for a long period of time, it will be extremely damaging – not just for nuclear but across the whole spectrum of industry”, he said.

No grounds for such state aid in EU treaties

Dr Dörte Fouquet, a lawyer for the Brussels-based law firm Becker Büttner Held, which specialises in energy and competition law, said Austria’s chances of success were “pretty high” because there were no grounds for giving such state aid under EU treaty law and Austria would question the common European interest in building a nuclear power plant in the UK.

She added that long delays now appeared inevitable: “A court process that kicks off in May would take a minimum of two years and if it goes into appeals, you’d then be looking at another two years. So it could be a minimum of three and a maximum of four years or longer.

But the Department of Energy and Climate Change remained bullish. “The UK is confident that the state aid case for Hinkley Point C is legally robust and we vigorously support the European Commission’s defence of its decision last year”, a  spokesman told the Guardian.

“This brings us one step closer to seeing new nuclear as part of our future low carbon energy mix. We have no reason to believe that Austria, or any other party, is preparing a case which has any merit.”

But DECC did not respond to questions about the effect that a lengthy court case might have on cost over-runs or a final investment decision.

The renewables industry has bridled at what some see as double-standards in EU decisions last year denying state aid to renewable energy in Germany, while allowing it for nuclear in the UK.

“It’s puzzling why the European Commission has decided to have a set of rules for one energy source and entirely different set for another”, said European Wind Energy Association spokesman Oliver Joy.

“If we want a level playing field for all energy forms in the EU then we need common standards that allow all technologies to compete on an equal footing.”

 

 

Arthur Neslen is the Europe environment correspondent at the Guardian. He has previously worked for the BBC, the Economist, Al Jazeera, and EurActiv, where his journalism won environmental awards. He has written two books about Israeli and Palestinian identity.

This article is a synthesis of two articles by Arthur Nelsen originally published on the Guardian: ‘Austria to launch lawsuit over Hinkley Point C nuclear subsidies‘ and ‘UK nuclear ambitions dealt fatal blow by Austrian legal challenge, say Greens‘. It is published on The Ecologist by kind permission via the Guardian Environment Network.

 

 




389354

Austria: ‘we will launch Hinkley C nuclear subsidy legal challenge by April’ Updated for 2026

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Austria is to launch a legal challenge against the European Union’s (EU) decision to allow billions of pounds of subsidies for Hinkley Point C, casting fresh doubt over the UK’s first planned nuclear reactors in 20 years.

In October, the EU approved the controversial £17.6bn subsidy deal for the power station, which is expected to provide 7% of the UK’s electricity by 2023.

David Cameron had previously hailed the subsidy deal between the French state-owned EDF and the UK government as “a very big day for our country”. He also described the signing of the Hinkley deal as marking “the next generation of nuclear power in Britain“, for its ability to meet energy demand and contribute to long-term security of supply.

But the appeal by Austria, a non-nuclear nation, will be launched by April and could delay a final investment decision by the UK government for over two years.

The Guardian understands that Luxembourg is very likely to support the case in the European Court of Justice, arguing that the UK’s loan guarantees – over a 35-year period – constitute illegal state aid. Another EU country may follow suit.

“There has been a high-level decision by our Chancellor and Vice Chancellor to challenge the EU decision on Hinkley within two months of its publication in the EU’s official journal”, said Andreas Molin, the director of Austria’s environment ministry. The journal’s publication is expected in the next fortnight.

Stefan Pehringer, a foreign policy adviser to the Austrian federal chancellory said: “The Austrian government has announced its readiness to appeal against the EC’s [European Commission] decision concerning state aid for the Hinkley Point project, as it does not consider nuclear power to be a sustainable form of technology – neither in environmental nor in economic terms.”

Can Hinkley survive the 2015 election?

Work has already begun at the Hinkley site, which the UK government said will have a capacity of 3.3GW, with the electricity it generates bought at a strike-price of £92.50 per megawatt hour, around double the market rate.

EDF had planned to sign a long-awaited funding agreement with its Chinese investment partners in March, thought to be key to settling procurement plans for the £24.5bn build, and the precursor to a final investment decision.

But the lawsuit may delay such plans, and introduce uncertainty about the UK’s attitude towards Hinkley after elections in May.

The Austrian government’s analysis suggests that European court cases of this nature typically last for one and a half years. But “as this is going to be a more complicated and fundamental case, it will last a little bit longer”, Molin said. “Two years could be a rough guess.”

He added: “If you accept the argument that Hinkley constitutes a ‘market failure’ as put forward by the Commission, you could apply it to all other means of electricity production, probably all other forms of energy conversion, and it might even apply beyond the energy sector. We think that the single energy market itself is at stake in this case.”

The Commission’s hurried and paradoxical decision

The EU’s original decision last year surprised many observers, as the then-competition commissioner Joaquín Almunia had previously expressed scepticism about Hinkley’s’ conformity with an exhaustive list of strict state aid criteria.

These govern proportionality, decarbonisation, the potential for market distortion, the definition of ‘market failures’ and, crucially, whether the public monies advance an “objective of common interest” for the bloc.

No grounds for the Commission’s volte-face have yet been published, but the Guardian has seen a draft of the EU decision from last October, suggesting that one key decider had been advised that Hinkley advanced an EU ‘common interest’ around security of supply.

A Commission investigation declared itself “unsure” whether the reactor would resolve the UK’s security of supply issues, and was unconvinced that ‘diversification’ of supplies, on its own, would justify the monies involved.

“The Commission however accepted that the decision was in line with the Euratom treaty”, the draft ruling says. The Euratom treaty obliges member states to facilitate investments in nuclear power and encourage ventures that lead to the technology’s development.

Molin said that Austria would argue that the Euratom treaty could not be used in this way in state aid cases, but there would be other lines of dispute. “We will try to prove that the commission did not consider all the things which it should have considered and that there were some procedural flaws”, he said.

Minutes from the Commission’s internal discussion of the issue show that the EC’s president at the time, José Manuel Barroso, viewed the Hinkley decision as unprecedented, and said that it “touched on a politically sensitive topic”.

No contract for the Hinkley plant was put out to tender, and the ruling sparked outrage among environmentalists in the EU, that shows no signs of dying down.

“The Commission took a political decision disguised as a legal one”, said Mark Johnston, a senior adviser to the European Policy Centre. “Barroso thought it would be easier to bend over for Cameron than to defend the single energy market. The significance of the case for energy investments across Europe could not be greater.”

A ‘fatal blow’, claim the Greens

Molly Scott Cato, the Green Party MEP for the South West region, which includes Hinkley, said: “I think that this court case is certainly going to delay the signing and also the construction of Hinkley.”

“As one of the government’s main arguments for Hinkley was that it would solve the ‘energy gap’ before renewables could be brought onstream, it is a fatal blow to Hinkley as part of a future energy strategy for the UK.”

Natalie Bennett, the leader of the Green Party, said that such claims now seemed risible. “I think we have seen the final generation of nuclear power, I am very pleased to say. It’s gone, it’s dusted. Lets focus on evidence-based renewables and energy conservation futures.”

But the UKIP MEP and energy spokesman, Roger Helmer, offered strong support for nuclear energy, qualified only by a caveat that the government’s Hinkley deal had been “excessively expensive” because of regulatory uncertainty from Brussels.

“Given that Hinkley is a trailblazer for the new generation of nuclear and now looks like being held up for a long period of time, it will be extremely damaging – not just for nuclear but across the whole spectrum of industry”, he said.

No grounds for such state aid in EU treaties

Dr Dörte Fouquet, a lawyer for the Brussels-based law firm Becker Büttner Held, which specialises in energy and competition law, said Austria’s chances of success were “pretty high” because there were no grounds for giving such state aid under EU treaty law and Austria would question the common European interest in building a nuclear power plant in the UK.

She added that long delays now appeared inevitable: “A court process that kicks off in May would take a minimum of two years and if it goes into appeals, you’d then be looking at another two years. So it could be a minimum of three and a maximum of four years or longer.

But the Department of Energy and Climate Change remained bullish. “The UK is confident that the state aid case for Hinkley Point C is legally robust and we vigorously support the European Commission’s defence of its decision last year”, a  spokesman told the Guardian.

“This brings us one step closer to seeing new nuclear as part of our future low carbon energy mix. We have no reason to believe that Austria, or any other party, is preparing a case which has any merit.”

But DECC did not respond to questions about the effect that a lengthy court case might have on cost over-runs or a final investment decision.

The renewables industry has bridled at what some see as double-standards in EU decisions last year denying state aid to renewable energy in Germany, while allowing it for nuclear in the UK.

“It’s puzzling why the European Commission has decided to have a set of rules for one energy source and entirely different set for another”, said European Wind Energy Association spokesman Oliver Joy.

“If we want a level playing field for all energy forms in the EU then we need common standards that allow all technologies to compete on an equal footing.”

 

 

Arthur Neslen is the Europe environment correspondent at the Guardian. He has previously worked for the BBC, the Economist, Al Jazeera, and EurActiv, where his journalism won environmental awards. He has written two books about Israeli and Palestinian identity.

This article is a synthesis of two articles by Arthur Nelsen originally published on the Guardian: ‘Austria to launch lawsuit over Hinkley Point C nuclear subsidies‘ and ‘UK nuclear ambitions dealt fatal blow by Austrian legal challenge, say Greens‘. It is published on The Ecologist by kind permission via the Guardian Environment Network.

 

 




389354

Austria: ‘we will launch Hinkley C nuclear subsidy legal challenge by April’ Updated for 2026

Leave a reply




Austria is to launch a legal challenge against the European Union’s (EU) decision to allow billions of pounds of subsidies for Hinkley Point C, casting fresh doubt over the UK’s first planned nuclear reactors in 20 years.

In October, the EU approved the controversial £17.6bn subsidy deal for the power station, which is expected to provide 7% of the UK’s electricity by 2023.

David Cameron had previously hailed the subsidy deal between the French state-owned EDF and the UK government as “a very big day for our country”. He also described the signing of the Hinkley deal as marking “the next generation of nuclear power in Britain“, for its ability to meet energy demand and contribute to long-term security of supply.

But the appeal by Austria, a non-nuclear nation, will be launched by April and could delay a final investment decision by the UK government for over two years.

The Guardian understands that Luxembourg is very likely to support the case in the European Court of Justice, arguing that the UK’s loan guarantees – over a 35-year period – constitute illegal state aid. Another EU country may follow suit.

“There has been a high-level decision by our Chancellor and Vice Chancellor to challenge the EU decision on Hinkley within two months of its publication in the EU’s official journal”, said Andreas Molin, the director of Austria’s environment ministry. The journal’s publication is expected in the next fortnight.

Stefan Pehringer, a foreign policy adviser to the Austrian federal chancellory said: “The Austrian government has announced its readiness to appeal against the EC’s [European Commission] decision concerning state aid for the Hinkley Point project, as it does not consider nuclear power to be a sustainable form of technology – neither in environmental nor in economic terms.”

Can Hinkley survive the 2015 election?

Work has already begun at the Hinkley site, which the UK government said will have a capacity of 3.3GW, with the electricity it generates bought at a strike-price of £92.50 per megawatt hour, around double the market rate.

EDF had planned to sign a long-awaited funding agreement with its Chinese investment partners in March, thought to be key to settling procurement plans for the £24.5bn build, and the precursor to a final investment decision.

But the lawsuit may delay such plans, and introduce uncertainty about the UK’s attitude towards Hinkley after elections in May.

The Austrian government’s analysis suggests that European court cases of this nature typically last for one and a half years. But “as this is going to be a more complicated and fundamental case, it will last a little bit longer”, Molin said. “Two years could be a rough guess.”

He added: “If you accept the argument that Hinkley constitutes a ‘market failure’ as put forward by the Commission, you could apply it to all other means of electricity production, probably all other forms of energy conversion, and it might even apply beyond the energy sector. We think that the single energy market itself is at stake in this case.”

The Commission’s hurried and paradoxical decision

The EU’s original decision last year surprised many observers, as the then-competition commissioner Joaquín Almunia had previously expressed scepticism about Hinkley’s’ conformity with an exhaustive list of strict state aid criteria.

These govern proportionality, decarbonisation, the potential for market distortion, the definition of ‘market failures’ and, crucially, whether the public monies advance an “objective of common interest” for the bloc.

No grounds for the Commission’s volte-face have yet been published, but the Guardian has seen a draft of the EU decision from last October, suggesting that one key decider had been advised that Hinkley advanced an EU ‘common interest’ around security of supply.

A Commission investigation declared itself “unsure” whether the reactor would resolve the UK’s security of supply issues, and was unconvinced that ‘diversification’ of supplies, on its own, would justify the monies involved.

“The Commission however accepted that the decision was in line with the Euratom treaty”, the draft ruling says. The Euratom treaty obliges member states to facilitate investments in nuclear power and encourage ventures that lead to the technology’s development.

Molin said that Austria would argue that the Euratom treaty could not be used in this way in state aid cases, but there would be other lines of dispute. “We will try to prove that the commission did not consider all the things which it should have considered and that there were some procedural flaws”, he said.

Minutes from the Commission’s internal discussion of the issue show that the EC’s president at the time, José Manuel Barroso, viewed the Hinkley decision as unprecedented, and said that it “touched on a politically sensitive topic”.

No contract for the Hinkley plant was put out to tender, and the ruling sparked outrage among environmentalists in the EU, that shows no signs of dying down.

“The Commission took a political decision disguised as a legal one”, said Mark Johnston, a senior adviser to the European Policy Centre. “Barroso thought it would be easier to bend over for Cameron than to defend the single energy market. The significance of the case for energy investments across Europe could not be greater.”

A ‘fatal blow’, claim the Greens

Molly Scott Cato, the Green Party MEP for the South West region, which includes Hinkley, said: “I think that this court case is certainly going to delay the signing and also the construction of Hinkley.”

“As one of the government’s main arguments for Hinkley was that it would solve the ‘energy gap’ before renewables could be brought onstream, it is a fatal blow to Hinkley as part of a future energy strategy for the UK.”

Natalie Bennett, the leader of the Green Party, said that such claims now seemed risible. “I think we have seen the final generation of nuclear power, I am very pleased to say. It’s gone, it’s dusted. Lets focus on evidence-based renewables and energy conservation futures.”

But the UKIP MEP and energy spokesman, Roger Helmer, offered strong support for nuclear energy, qualified only by a caveat that the government’s Hinkley deal had been “excessively expensive” because of regulatory uncertainty from Brussels.

“Given that Hinkley is a trailblazer for the new generation of nuclear and now looks like being held up for a long period of time, it will be extremely damaging – not just for nuclear but across the whole spectrum of industry”, he said.

No grounds for such state aid in EU treaties

Dr Dörte Fouquet, a lawyer for the Brussels-based law firm Becker Büttner Held, which specialises in energy and competition law, said Austria’s chances of success were “pretty high” because there were no grounds for giving such state aid under EU treaty law and Austria would question the common European interest in building a nuclear power plant in the UK.

She added that long delays now appeared inevitable: “A court process that kicks off in May would take a minimum of two years and if it goes into appeals, you’d then be looking at another two years. So it could be a minimum of three and a maximum of four years or longer.

But the Department of Energy and Climate Change remained bullish. “The UK is confident that the state aid case for Hinkley Point C is legally robust and we vigorously support the European Commission’s defence of its decision last year”, a  spokesman told the Guardian.

“This brings us one step closer to seeing new nuclear as part of our future low carbon energy mix. We have no reason to believe that Austria, or any other party, is preparing a case which has any merit.”

But DECC did not respond to questions about the effect that a lengthy court case might have on cost over-runs or a final investment decision.

The renewables industry has bridled at what some see as double-standards in EU decisions last year denying state aid to renewable energy in Germany, while allowing it for nuclear in the UK.

“It’s puzzling why the European Commission has decided to have a set of rules for one energy source and entirely different set for another”, said European Wind Energy Association spokesman Oliver Joy.

“If we want a level playing field for all energy forms in the EU then we need common standards that allow all technologies to compete on an equal footing.”

 

 

Arthur Neslen is the Europe environment correspondent at the Guardian. He has previously worked for the BBC, the Economist, Al Jazeera, and EurActiv, where his journalism won environmental awards. He has written two books about Israeli and Palestinian identity.

This article is a synthesis of two articles by Arthur Nelsen originally published on the Guardian: ‘Austria to launch lawsuit over Hinkley Point C nuclear subsidies‘ and ‘UK nuclear ambitions dealt fatal blow by Austrian legal challenge, say Greens‘. It is published on The Ecologist by kind permission via the Guardian Environment Network.

 

 




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Austria: ‘we will launch Hinkley C nuclear subsidy legal challenge by April’ Updated for 2026

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Austria is to launch a legal challenge against the European Union’s (EU) decision to allow billions of pounds of subsidies for Hinkley Point C, casting fresh doubt over the UK’s first planned nuclear reactors in 20 years.

In October, the EU approved the controversial £17.6bn subsidy deal for the power station, which is expected to provide 7% of the UK’s electricity by 2023.

David Cameron had previously hailed the subsidy deal between the French state-owned EDF and the UK government as “a very big day for our country”. He also described the signing of the Hinkley deal as marking “the next generation of nuclear power in Britain“, for its ability to meet energy demand and contribute to long-term security of supply.

But the appeal by Austria, a non-nuclear nation, will be launched by April and could delay a final investment decision by the UK government for over two years.

The Guardian understands that Luxembourg is very likely to support the case in the European Court of Justice, arguing that the UK’s loan guarantees – over a 35-year period – constitute illegal state aid. Another EU country may follow suit.

“There has been a high-level decision by our Chancellor and Vice Chancellor to challenge the EU decision on Hinkley within two months of its publication in the EU’s official journal”, said Andreas Molin, the director of Austria’s environment ministry. The journal’s publication is expected in the next fortnight.

Stefan Pehringer, a foreign policy adviser to the Austrian federal chancellory said: “The Austrian government has announced its readiness to appeal against the EC’s [European Commission] decision concerning state aid for the Hinkley Point project, as it does not consider nuclear power to be a sustainable form of technology – neither in environmental nor in economic terms.”

Can Hinkley survive the 2015 election?

Work has already begun at the Hinkley site, which the UK government said will have a capacity of 3.3GW, with the electricity it generates bought at a strike-price of £92.50 per megawatt hour, around double the market rate.

EDF had planned to sign a long-awaited funding agreement with its Chinese investment partners in March, thought to be key to settling procurement plans for the £24.5bn build, and the precursor to a final investment decision.

But the lawsuit may delay such plans, and introduce uncertainty about the UK’s attitude towards Hinkley after elections in May.

The Austrian government’s analysis suggests that European court cases of this nature typically last for one and a half years. But “as this is going to be a more complicated and fundamental case, it will last a little bit longer”, Molin said. “Two years could be a rough guess.”

He added: “If you accept the argument that Hinkley constitutes a ‘market failure’ as put forward by the Commission, you could apply it to all other means of electricity production, probably all other forms of energy conversion, and it might even apply beyond the energy sector. We think that the single energy market itself is at stake in this case.”

The Commission’s hurried and paradoxical decision

The EU’s original decision last year surprised many observers, as the then-competition commissioner Joaquín Almunia had previously expressed scepticism about Hinkley’s’ conformity with an exhaustive list of strict state aid criteria.

These govern proportionality, decarbonisation, the potential for market distortion, the definition of ‘market failures’ and, crucially, whether the public monies advance an “objective of common interest” for the bloc.

No grounds for the Commission’s volte-face have yet been published, but the Guardian has seen a draft of the EU decision from last October, suggesting that one key decider had been advised that Hinkley advanced an EU ‘common interest’ around security of supply.

A Commission investigation declared itself “unsure” whether the reactor would resolve the UK’s security of supply issues, and was unconvinced that ‘diversification’ of supplies, on its own, would justify the monies involved.

“The Commission however accepted that the decision was in line with the Euratom treaty”, the draft ruling says. The Euratom treaty obliges member states to facilitate investments in nuclear power and encourage ventures that lead to the technology’s development.

Molin said that Austria would argue that the Euratom treaty could not be used in this way in state aid cases, but there would be other lines of dispute. “We will try to prove that the commission did not consider all the things which it should have considered and that there were some procedural flaws”, he said.

Minutes from the Commission’s internal discussion of the issue show that the EC’s president at the time, José Manuel Barroso, viewed the Hinkley decision as unprecedented, and said that it “touched on a politically sensitive topic”.

No contract for the Hinkley plant was put out to tender, and the ruling sparked outrage among environmentalists in the EU, that shows no signs of dying down.

“The Commission took a political decision disguised as a legal one”, said Mark Johnston, a senior adviser to the European Policy Centre. “Barroso thought it would be easier to bend over for Cameron than to defend the single energy market. The significance of the case for energy investments across Europe could not be greater.”

A ‘fatal blow’, claim the Greens

Molly Scott Cato, the Green Party MEP for the South West region, which includes Hinkley, said: “I think that this court case is certainly going to delay the signing and also the construction of Hinkley.”

“As one of the government’s main arguments for Hinkley was that it would solve the ‘energy gap’ before renewables could be brought onstream, it is a fatal blow to Hinkley as part of a future energy strategy for the UK.”

Natalie Bennett, the leader of the Green Party, said that such claims now seemed risible. “I think we have seen the final generation of nuclear power, I am very pleased to say. It’s gone, it’s dusted. Lets focus on evidence-based renewables and energy conservation futures.”

But the UKIP MEP and energy spokesman, Roger Helmer, offered strong support for nuclear energy, qualified only by a caveat that the government’s Hinkley deal had been “excessively expensive” because of regulatory uncertainty from Brussels.

“Given that Hinkley is a trailblazer for the new generation of nuclear and now looks like being held up for a long period of time, it will be extremely damaging – not just for nuclear but across the whole spectrum of industry”, he said.

No grounds for such state aid in EU treaties

Dr Dörte Fouquet, a lawyer for the Brussels-based law firm Becker Büttner Held, which specialises in energy and competition law, said Austria’s chances of success were “pretty high” because there were no grounds for giving such state aid under EU treaty law and Austria would question the common European interest in building a nuclear power plant in the UK.

She added that long delays now appeared inevitable: “A court process that kicks off in May would take a minimum of two years and if it goes into appeals, you’d then be looking at another two years. So it could be a minimum of three and a maximum of four years or longer.

But the Department of Energy and Climate Change remained bullish. “The UK is confident that the state aid case for Hinkley Point C is legally robust and we vigorously support the European Commission’s defence of its decision last year”, a  spokesman told the Guardian.

“This brings us one step closer to seeing new nuclear as part of our future low carbon energy mix. We have no reason to believe that Austria, or any other party, is preparing a case which has any merit.”

But DECC did not respond to questions about the effect that a lengthy court case might have on cost over-runs or a final investment decision.

The renewables industry has bridled at what some see as double-standards in EU decisions last year denying state aid to renewable energy in Germany, while allowing it for nuclear in the UK.

“It’s puzzling why the European Commission has decided to have a set of rules for one energy source and entirely different set for another”, said European Wind Energy Association spokesman Oliver Joy.

“If we want a level playing field for all energy forms in the EU then we need common standards that allow all technologies to compete on an equal footing.”

 

 

Arthur Neslen is the Europe environment correspondent at the Guardian. He has previously worked for the BBC, the Economist, Al Jazeera, and EurActiv, where his journalism won environmental awards. He has written two books about Israeli and Palestinian identity.

This article is a synthesis of two articles by Arthur Nelsen originally published on the Guardian: ‘Austria to launch lawsuit over Hinkley Point C nuclear subsidies‘ and ‘UK nuclear ambitions dealt fatal blow by Austrian legal challenge, say Greens‘. It is published on The Ecologist by kind permission via the Guardian Environment Network.

 

 




389354

Austria: ‘we will launch Hinkley C nuclear subsidy legal challenge by April’ Updated for 2026

Leave a reply




Austria is to launch a legal challenge against the European Union’s (EU) decision to allow billions of pounds of subsidies for Hinkley Point C, casting fresh doubt over the UK’s first planned nuclear reactors in 20 years.

In October, the EU approved the controversial £17.6bn subsidy deal for the power station, which is expected to provide 7% of the UK’s electricity by 2023.

David Cameron had previously hailed the subsidy deal between the French state-owned EDF and the UK government as “a very big day for our country”. He also described the signing of the Hinkley deal as marking “the next generation of nuclear power in Britain“, for its ability to meet energy demand and contribute to long-term security of supply.

But the appeal by Austria, a non-nuclear nation, will be launched by April and could delay a final investment decision by the UK government for over two years.

The Guardian understands that Luxembourg is very likely to support the case in the European Court of Justice, arguing that the UK’s loan guarantees – over a 35-year period – constitute illegal state aid. Another EU country may follow suit.

“There has been a high-level decision by our Chancellor and Vice Chancellor to challenge the EU decision on Hinkley within two months of its publication in the EU’s official journal”, said Andreas Molin, the director of Austria’s environment ministry. The journal’s publication is expected in the next fortnight.

Stefan Pehringer, a foreign policy adviser to the Austrian federal chancellory said: “The Austrian government has announced its readiness to appeal against the EC’s [European Commission] decision concerning state aid for the Hinkley Point project, as it does not consider nuclear power to be a sustainable form of technology – neither in environmental nor in economic terms.”

Can Hinkley survive the 2015 election?

Work has already begun at the Hinkley site, which the UK government said will have a capacity of 3.3GW, with the electricity it generates bought at a strike-price of £92.50 per megawatt hour, around double the market rate.

EDF had planned to sign a long-awaited funding agreement with its Chinese investment partners in March, thought to be key to settling procurement plans for the £24.5bn build, and the precursor to a final investment decision.

But the lawsuit may delay such plans, and introduce uncertainty about the UK’s attitude towards Hinkley after elections in May.

The Austrian government’s analysis suggests that European court cases of this nature typically last for one and a half years. But “as this is going to be a more complicated and fundamental case, it will last a little bit longer”, Molin said. “Two years could be a rough guess.”

He added: “If you accept the argument that Hinkley constitutes a ‘market failure’ as put forward by the Commission, you could apply it to all other means of electricity production, probably all other forms of energy conversion, and it might even apply beyond the energy sector. We think that the single energy market itself is at stake in this case.”

The Commission’s hurried and paradoxical decision

The EU’s original decision last year surprised many observers, as the then-competition commissioner Joaquín Almunia had previously expressed scepticism about Hinkley’s’ conformity with an exhaustive list of strict state aid criteria.

These govern proportionality, decarbonisation, the potential for market distortion, the definition of ‘market failures’ and, crucially, whether the public monies advance an “objective of common interest” for the bloc.

No grounds for the Commission’s volte-face have yet been published, but the Guardian has seen a draft of the EU decision from last October, suggesting that one key decider had been advised that Hinkley advanced an EU ‘common interest’ around security of supply.

A Commission investigation declared itself “unsure” whether the reactor would resolve the UK’s security of supply issues, and was unconvinced that ‘diversification’ of supplies, on its own, would justify the monies involved.

“The Commission however accepted that the decision was in line with the Euratom treaty”, the draft ruling says. The Euratom treaty obliges member states to facilitate investments in nuclear power and encourage ventures that lead to the technology’s development.

Molin said that Austria would argue that the Euratom treaty could not be used in this way in state aid cases, but there would be other lines of dispute. “We will try to prove that the commission did not consider all the things which it should have considered and that there were some procedural flaws”, he said.

Minutes from the Commission’s internal discussion of the issue show that the EC’s president at the time, José Manuel Barroso, viewed the Hinkley decision as unprecedented, and said that it “touched on a politically sensitive topic”.

No contract for the Hinkley plant was put out to tender, and the ruling sparked outrage among environmentalists in the EU, that shows no signs of dying down.

“The Commission took a political decision disguised as a legal one”, said Mark Johnston, a senior adviser to the European Policy Centre. “Barroso thought it would be easier to bend over for Cameron than to defend the single energy market. The significance of the case for energy investments across Europe could not be greater.”

A ‘fatal blow’, claim the Greens

Molly Scott Cato, the Green Party MEP for the South West region, which includes Hinkley, said: “I think that this court case is certainly going to delay the signing and also the construction of Hinkley.”

“As one of the government’s main arguments for Hinkley was that it would solve the ‘energy gap’ before renewables could be brought onstream, it is a fatal blow to Hinkley as part of a future energy strategy for the UK.”

Natalie Bennett, the leader of the Green Party, said that such claims now seemed risible. “I think we have seen the final generation of nuclear power, I am very pleased to say. It’s gone, it’s dusted. Lets focus on evidence-based renewables and energy conservation futures.”

But the UKIP MEP and energy spokesman, Roger Helmer, offered strong support for nuclear energy, qualified only by a caveat that the government’s Hinkley deal had been “excessively expensive” because of regulatory uncertainty from Brussels.

“Given that Hinkley is a trailblazer for the new generation of nuclear and now looks like being held up for a long period of time, it will be extremely damaging – not just for nuclear but across the whole spectrum of industry”, he said.

No grounds for such state aid in EU treaties

Dr Dörte Fouquet, a lawyer for the Brussels-based law firm Becker Büttner Held, which specialises in energy and competition law, said Austria’s chances of success were “pretty high” because there were no grounds for giving such state aid under EU treaty law and Austria would question the common European interest in building a nuclear power plant in the UK.

She added that long delays now appeared inevitable: “A court process that kicks off in May would take a minimum of two years and if it goes into appeals, you’d then be looking at another two years. So it could be a minimum of three and a maximum of four years or longer.

But the Department of Energy and Climate Change remained bullish. “The UK is confident that the state aid case for Hinkley Point C is legally robust and we vigorously support the European Commission’s defence of its decision last year”, a  spokesman told the Guardian.

“This brings us one step closer to seeing new nuclear as part of our future low carbon energy mix. We have no reason to believe that Austria, or any other party, is preparing a case which has any merit.”

But DECC did not respond to questions about the effect that a lengthy court case might have on cost over-runs or a final investment decision.

The renewables industry has bridled at what some see as double-standards in EU decisions last year denying state aid to renewable energy in Germany, while allowing it for nuclear in the UK.

“It’s puzzling why the European Commission has decided to have a set of rules for one energy source and entirely different set for another”, said European Wind Energy Association spokesman Oliver Joy.

“If we want a level playing field for all energy forms in the EU then we need common standards that allow all technologies to compete on an equal footing.”

 

 

Arthur Neslen is the Europe environment correspondent at the Guardian. He has previously worked for the BBC, the Economist, Al Jazeera, and EurActiv, where his journalism won environmental awards. He has written two books about Israeli and Palestinian identity.

This article is a synthesis of two articles by Arthur Nelsen originally published on the Guardian: ‘Austria to launch lawsuit over Hinkley Point C nuclear subsidies‘ and ‘UK nuclear ambitions dealt fatal blow by Austrian legal challenge, say Greens‘. It is published on The Ecologist by kind permission via the Guardian Environment Network.

 

 




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