UK's first new N-power plant Hinkley Point C gets EU backing: report

A UK government plan to guarantee the price of power from its first new nuclear project in decades that won EU backing in a landmark ruling yesterday, is now faced with legal challenges.

A Reuters report, which cited sources, said the move was seen as market-distorting by opponents, although the price guarantee was approved in a 16-to-5 vote. There was one abstention in the meeting of the College of Commissioners, which did not have full attendance.

The ruling clears the decks for the £16-billion Hinkley Point C nuclear power station in southwest England, which would be operated by French utility EDF.

Pressing hard for approval, the UK said replacing its ageing nuclear reactors was vital to meeting its environmental goals.

According to the EC, the UK government helped secure the deal by agreeing to a lower subsidy as a smaller share of windfall profits for EDF.

According to commentators, the case would serve as a precedence for countries like the Czech Republic, Lithuania and Poland that had sought guidance on the level of state aid allowed.

The Commission, the executive wing of the EU, had not approved state aid for a new nuclear plant earlier.

"We have concluded that a market failure exists. Without support, this investment would not take place," Competition Commissioner Joaquin Almunia told reporters.

Meanwhile, the decision has been hailed by leading figures in the local business community, Southwest Business reported.

Councillor David Hall, cabinet member for Business and Inward Investments at Somerset County Council, said it was a major milestone in the Hinkley C Project, adding it was also fantastically exciting news for Somerset.

He said it could now be anticipated that once EDF Energy had reached its final agreement with its investment partners, communities in Somerset would be set to benefit hugely from the creation of jobs and millions of pounds-worth of investment in the local infrastructure.

According to James Durie, executive director of Business West, the news was a massive economic boost for Bristol and the South West. After many months of uncertainty, business would be very pleased that the UK's first new nuclear power plant in decades had been given the go ahead, he said.

Businesses in the region would be a vital part of the supply chain opportunities on offer for the £16 billion project, with the possibility that it could create up to 25,000 jobs.