The European Commission has opened an investigation into whether the proposed Hinkley Point C nuclear power plant in the UK can be built without the government’s help.
According to The Telegraph, planned subsidies for the plant could exceed the 16 billion pounds ($26.2 billion) cost of the plant, and may not be necessary. Consumers could end up paying 17 billion pounds ($27.8 billion) in subsidies to France-based EDF, which was picked to build the nuclear power plant.
The Commission said in the article that its investigation will look into whether the subsidies are in line with European Union state aid rules, and that commissioners doubt the project suffers from a “genuine market failure.”
EDF was picked to build the plant in October. The scheme for Hinkley Point guarantees EDF a price for the power the plant will generate for 35 years. That price – twice the current market price of power – will be subsidized through so-called top-up payments, which will be funded by levies on UK energy customers when the market price is lower than the guaranteed level, the article said. Critics have questioned the funding, saying it would be more cost-effective for the government to fund the construction itself.
EDF said in a statement that they agree with the Commission’s investigation into the contract, but that the state aid is needed.
“EDF Energy said in October that the agreement for Hinkley Point C would need state aid approval before a final investment decision can be taken,” the statement said.
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