UK sets state guarantees for new nuclear plant

First new European nuclear plant since Fukushima could set precedent for EU state aid.

The United Kingdom signed a deal with French energy giant EDF today (21 October) to build a £16 billion (€19 billion) nuclear plant in Southwest England. It is the first new nuclear plant in the UK in a generation, and the first to be authorised since the Fukishima nuclear disaster in Japan last year.

The plant will receive a guaranteed electricity price of £92.50 per megawatt-hour for 35 years. This is more than double the current market rate.

The UK will have to seek approval from the European Commission to pay the company rates for electricity that are above the current market rate. It will be the first time a member state has requested such an approval.

The Commission lacks set guidelines for granting state aid for nuclear, and was considering setting them out in a new proposal on state aid rules. However, earlier this month Joaquin Almunia, the European commissioner for competition, told his colleagues that he has ruled out including nuclear power in the state aid rules revision. The Commission will continue authorising state aid for nuclear on a case-by-case basis. Setting out the nuclear guidelines would probably have made it easier for member states to get nuclear aid authorised.

The deal also marks the first ownership of nuclear power in the UK by China. China General Nuclear Corporation and China National Nuclear Corporation will take a combined stake of 30% to 40% in the new plant. French state-owned nuclear group Areva will own 10%.

The government says the plant will provide 7% of the country’s electricity by the time it is completed in 2023.

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