Debate grows over new Hinkley C nuclear power station

The Guardian reports, 18th December 2013: “The European Commission has started an investigation into UK plans to subsidise the construction and operation of Hinkley Point C nuclear power station in Somerset, in a challenge to the government’s plans to overhaul Britain’s creaking energy infrastructure. On the day royal assent was finally given to the coalition’s controversial Energy Act, the EU’s executive arm expressed doubts that British ministers could justify state aid to nuclear which it estimated could reach £17bn.

The EC warned of the risk of a “subsidy race” between member states and Joaquín Almunia, vice-president for competition policy, described the aid package as a complex measure of an unprecedented nature and scale. “The Commission therefore needs to investigate thoroughly its impact on the UK and the EU internal energy markets, and is requesting all interested parties to submit their observations.”

The British government has always denied that the financial support is a subsidy and said it was needed for the proposed nuclear plant because the market is faced with an unprecedented situation, the aims of combating climate change and assuring energy security.

EDF, the French state-owned company that will operate Hinkley Point C, said it was looking forward to putting its case direct to Brussels. “This investigation gives the government and others the opportunity to show that electricity market reform in the UK is essential to deliver the investment needed for the country’s low carbon energy future at a price that is fair for customers,” it said a statement. “Without this reform, the investment will not take place. The Hinkley Point C agreement is proof that this reform works to attract the investment needed to secure Britain’s future electricity supply.”

Ineos boss Jim Ratcliffe

On 16th December, 2013, BBC TV News reported: “Power from the new Hinkley C nuclear generator will be too expensive, the boss of one of the UK’s biggest energy consumers has warned. Jim Ratcliffe, whose company Ineos owns the Grangemouth plant in Scotland, told the BBC that UK manufacturers would find the price unaffordable.

The UK government has guaranteed a price of £92.50 per megawatt hour (Mwh). Mr Ratcliffe said Ineos recently agreed a deal for nuclear power in France at 45 euros (£37.94) per Mwh. “Forget it” said Mr. Ratcliffe, “nobody in manufacturing is going to go near £95 per Mwh.”

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