Austrian legal action could delay Hinkley Point nuclear for three to four years

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Based on the average data associated with such cases, the legal objection made by Austria this week against the European Commission to facilitate Hinkley Point C nuclear power plant could delay the progress of the facility for around three to four years.

That timeframe is based on the average expectation associated with such cases, as confirmed this week by a legal expert who had been advising the Austrian government on the matter.
Hinkley Point C sign
It is less than the worst case scenario timeframe of five to eight years but that delay is not beyond the bounds of possibility as the subsequent decision could still be challenged.

Dr Dorte Fouquet, Partner, BBH Brussels who has been advising Vienna on the matter of their objection to Britain’s flagship nuclear power project on the basis of State Aid contravention told Power Engineering International, “From the publication on average statistics from the European Court in State Aid cases the duration can be on average between 31,5 und 50,3 months.”

Dr Fouquet quoted the information from the 2013 Annual report of the European Court of Justice, (pg. 186).

She had told an audience at Platts Power Summit in central London at the end of April that if Vienna pressed on with its challenge it could set back construction of the Hinkley Point C project for even longer than that average.

“Based on whether a party was unhappy with that, it could then go again before the European Court of Justice, which could also take years, though probably not as much as the first; this is based on average procedures.”

Paul Spence, Director of Strategy and Corporate Affairs for EDF, when asked for a response to this at that time, “Not speaking from an EDF point of view but as a UK citizen, to be faced with a circumstance where we have 5 to 8 years of pause as a result of an objection, that doesn’t look like it will be a positive outcome for the UK energy system.”

Both the British government and EDF are now sticking resolutely to their belief that the Austrian challenge is bound to fail. Regardless of the inevitability of Austrian’s case being dismissed, there remains the question of a potential, and difficult delay for the project, but EDF are not responding to that specific possibility.

Adam Shortman, Senior Media Officer with DECC told Power Engineering International went further saying, “We do not anticipate significant delays as a result of the challenge. We have no reason to believe this challenge has any merit.”

An EDF spokesperson added, “There is no change to our previous statement (from 29 June).”

That statement read, "We are confident that the European Commission's State aid decision on Hinkley Point C is legally robust and have no reason to believe that Austria will submit a challenge of any merit."

Interestingly that bullishness is not just confined to those in the UK who are pro-Hinkley Point C.

Dr. Reinhard Schanda, a partner at the Vienna-based law firm Sattler & Schanda told PEi that a three to four year delay is 'optimistic'.

"The General Court is not the final instance. Ultimately the European Court of Justice will decide the case, which will take another 14-24 months. Therefore a delay of only three years seems a quite optimistic guess (from the operator’s perspective) to me.  Most likely it will take five to six years time."

"If the appeal is successful, any aid that has been paid in the meantime will have to be repaid. Obviously, this will severely complicate any financing of the project – unless the operator is able to finance through 100 per cent equity and is willing to put this equity at full risk."

In an email statement, Schanda went on to outlined the prospects of the Austrian challenge being fended off.

"With regard to the chances of success: There are several cumulative criteria that have to be fulfilled in order to qualify a state aid measure as compatible with the internal market under Art 107 para 3 TFEU. If only one criteria is not fulfilled, a state aid measure has to be declared prohibited."

"The most interesting question will be, whether a provision of the 1957 Euratom Treaty, encouraging the ‘development of nuclear energy’, can support the Commission's view that the construction of Hinkley Point C is a 2014 EU objective of common interest (to develop innovative economic activities), although (i) Euratom and the EU are two different international organizations and Article 194 TFEU expressly provides neutrality versus various generation methods and (ii) one might well argue that nuclear energy since 1957 has long been developed and therefore lacks the necessary innovation for a state aid under Art 107 para 3 lit c TFEU.

PEi  contacted the European Court’s press office to confirm average timeframes for similar cases impacted by such objections. Christopher Fretwell, Media Officer for the European Court of Justice pointed out the difference between the basic challenge Austria has made, and a request that the decision be suspended.

"Average times are now at the lower end of that range, around 2.5 years for State aid cases. An appeal of any General Court judgment to the ECJ could take around 18 months," Fretwell told Power Engineering International. "However, the mere fact that the Commission decision has been appealed has no effect on the decision itself – it is presumed valid until judged otherwise."

"If Austria want to ask for the decision to be suspended pending the outcome of the case then they can do so, at present it wouldn’t appear that they have. Moreover such a request is only granted if 1) the action in the main proceedings doesn’t appear to be totally without merit, 2) that such a suspension is urgent and that Austria would suffer serious and irreparable harm without it and 3) a suspension is necessary taking into account the balancing of the parties' interests and of the public interest."

Whether that all means Austria has genuinely hurt the UK's nuclear programme, or if it resembles more of a symbolic objection, is difficult to quantify.
 

 



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