EC’s Almunia approves Hinkley Point state aid case

UPDATE: The European Commission has taken a significant step towards agreeing a deal with the UK government over whether the Hinkley Point nuclear project can move ahead under EU competition rules.

A spokesperson for EC competition commissioner Joaquín Almunia confirmed on Monday that he has made a positive recommendation on the case, just five days after Utility Week reported that energy secretary Ed Davey held crunch talks with the commissioner over the deal.

“Vice President Almunia will propose to the college of commissioners to take a positive decision in this case. In principle a decision should be taken within this mandate,” said EC spokesman Antoine Colombani.

Almunia’s recommendation is not a final decision but it will be taken into account by the College of Commissioners during a further consultation phase on the project’s compliance with competition rules.

A statement from project developer EDF Energy welcomed the approval as “another positive step”.

If its nuclear project receives an official all-clear from the EC, a final investment decision is expected shortly thereafter, with construction to begin next year.

The approval would be the first of its kind for ‘new nuclear’ in the EU, meaning the outcome of the case has wider implications for nuclear projects across Europe.

The investigation began in January this year with the Commission casting serious doubts over whether the project would qualify for state aid. The Commission said the deal could over-compensate EDF and distort competition and questioned whether nuclear technology was immature enough to warrant state aid. It also challenged the UK’s argument that Hinkley Point C is needed to meet carbon reduction and security of supply goals, given it will not be operational until 2023.

Following the 70-page document outlining its initial concerns, the EC has been in ongoing talks with the UK government to determine if they are founded.

“The State Aid investigation has been rigorous, robust and thorough and we expect that the College of  Commissioners will recognise this,” said a spokesperson for EDF Energy.

The commission said a final decision would be made before the end of the year but it is widely expected to be decided before the current term of office expires at the end of October.