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Hinkley Point C deal comes at massive and unjustified cost to consumers says watchdog

Hinkley Point C deal comes at massive and unjustified cost to consumers says watchdog

Utility Week, 2014-03-04

Megan Darby

A government bias towards nuclear is piling a “massive and unjustified” cost on consumers, Consumer Futures has argued.

The deal government struck with EDF Energy to support a new nuclear plant at Hinkley Point fails to meet European competition rules, the watchdog said. The package includes construction guarantees and a “strike price” of £92.50/MWh for 35 years.

Consumer Futures was responding to a consultation on new state aid guidelines from the European Commission. The guidelines cover renewable subsidies but make no explicit provision for nuclear support.

Chris Alexander of Consumer Futures said nuclear should be treated the same as mature renewable technologies.

Echoing concerns published by the Commission itself in January, Alexander said the Hinkley Point package did not meet the standards set for renewable support, for example being subject to a competitive bidding process.

Alexander wrote: “This kind of undue discrimination in favour of one technology over others constitutes a failure in the UK stimulus regime... Our fear is that failures like this will contribute to a massive and unjustified transfer of wealth from the consumer to the project proponents.”

EDF Energy bosses and UK ministers have consistently expressed confidence in getting the necessary state aid approval from Brussels.