EU to examine aid for UK nuclear deal

Tuesday, October 22, 2013

AFP - The European Commission said Tuesday it would examine British government support for a massive 19-billion-euro nuclear plant to be built by French and Chinese firms.

London announced Monday plans for two reactors to be built by French energy giant EDF, backed by the world's leading nuclear power company, Areva of France, and Chinese nuclear firms CGN and CNNC.

Controversially, the deal guarantees the price for electricity produced over 35 years at about double the prevailing rate -- with the government to pay the difference if the market falls below the set level.

Such intervention in the energy sector is usually intended to support renewable sources such as solar and wind and its use in a nuclear project is proving controversial.

A spokesman for European Union Competition Commissioner Joaquin Almunia said the EU executive, which polices state aid rules, was in contact with London but had not yet received formal notification of its state-aid plans.

But Antoine Colombani stressed that Brussels would not be mixing up EU energy policy, which aims to support renewables, with state-aid rules designed to prevent the distortion of Europe's single market of half a billion consumers and millions of companies.

"As regards nuclear power, the Commission has a neutral stance," Colombani told a regular press conference.

"As far as state aid is concerned ... the UK intends to support nuclear power.

"We have to assess these plans, under EU state aid rules."

Colombani said the Commission would shortly update its guidelines covering state aid for the energy market in general.

These "will not include specific guidelines as concerns nuclear power," he said, and will instead feature "case-by-case assessments."

The deal has angered anti-nuclear activists.

"Instead of subsidising nuclear energy production, the government should be investing more in safe, clean and affordable renewable energy," said Kate Hudson, general secretary of the Campaign for Nuclear Disarmament (CND).

The EU is divided over the future of nuclear energy, with some member states even arguing that it should be considered as a renewable.

France relies on nuclear for the bulk of its electricity and will continue to do so, while Germany has decided to phase it out altogether amid safety concerns over ageing reactors.

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