European Commission proposes to approve EDF鈥檚 funding deal with the UK government within weeks
The European Commission is set to give EDF鈥檚 deal with the government to fund its 拢16bn Hinkley Point nuclear power plant the green light next month.
The project has been stuck in limbo after the deal between EDF and the UK government to guarantee the price EDF can charge for electricity from the plant was referred to the EC to check it complied with state aid rules in December. However, a European Commission spokesman said yesterday the Commission will now approve the plans.
The UK government and EDF鈥檚 deal, called a 鈥渃ontract for difference鈥�, was agreed last October and guarantees that EDF will be paid 拢92.60/MWh for the electricity from the plant for 35 years, which is roughly twice the current wholesale price of power.
The deal is designed to ensure the project gets built and to allow EDF and its partners the security to make the massive investment required.
The EC initially produced a report in January which was highly critical of the deal, calling into question whether it was really necessary. The report also said the whole contract for difference system risked 鈥渃rowding out鈥� investment in renewable energy projects.
But since then concerns appear to have been allayed and a spokesman for Joaqu铆n Almunia, the EU Competition Commissioner, said yesterday that the 鈥渄iscussions with the UK authorities led to an agreement.鈥�
He added: 鈥淥n this basis, 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.鈥�
Almunia鈥檚 decision will need to be ratified by the rest of the commissioners.
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