David Cameron has threatened to retaliate over Austria’s plans to mount a legal challenge to the European Union’s (EU) decision to allow billions of pounds of subsidies for the Hinkley Point C nuclear project. Thankfully the Austrian Government has said it won’t be intimidated by threats.
Doug Parr, chief scientist at Greenpeace, criticised the government for bullying the Austrians for daring to question the “huge and wasteful energy project”, which would raise bills for British consumers.
Councillor Mark Hackett for the Nuclear Free Local Authorities said Austria should be commended for bringing us to our senses and forcing us to see the necessity of a quite different low carbon strategy; where renewables, energy efficiency and decentralised energy can become the norm.
EDF Energy has abandoned its March 2015 deadline for making an investment decision and warned that talks on the project may still take a “considerable” time. The project’s Chinese backers have demanded that the French government protect them if it goes bust. The Chinese were reported to have serious concerns about the EPR reactor design and are refusing to invest unless the French government promises to bail out Areva, if necessary, and cover their share of any cost overruns.
Complex negotiations involving British ministers, their opposite numbers in Paris, EDF Energy and the Chinese have been complicated still further by the legal challenge brought by Austria. Now EDF Energy is seeking assurances from the UK Government that if Austria wins the case and the project has to be abandoned halfway through, the company will receive compensation for the money invested up to that point.
EDF said that before it could take a decision it needed to sign deals with co-investors, gain European Commission and UK government approval of the waste transfer contract arrangements, finalise a £10 billion loan guarantee from the Treasury and finalise the subsidy contract provisionally agreed with the UK Government in 2013.
The House of Commons Public Accounts Committee has abandoned plans to scrutinise the Hinkley deal because it probably won’t be struck before the general election in May. The committee had intended to carry out an inquiry in the next few months, but the National Audit Office (NAO) has said that it looks increasingly unlikely that anything will be agreed before the election.
Tom Greatrex, shadow energy minister, said, last November, that he wants the NAO to scrutinise the 35-year subsidy deal to ensure that it represents value for money. However, the Secretary of State for Energy and Climate Change, Ed Davey, made clear to the House of Commons Energy and Climate Change Committee that it is usual practise for the NAO to audit this type of agreement AFTER it has been signed. So if the NAO expresses any kind of concern about the deal it will be too late to do anything about it.
The NAO has already expressed concern that the UK guarantee scheme which was introduced in 2012 to encourage lending to projects which had stalled during the financial crisis. A total of £34bn is expected to be invested in 46 projects, of which half could go to Hinkley. The NAO says the scheme will cost taxpayers an extra £35m-£120m a year — depending on whether Hinkley Point C is included —compared with direct lending by government.
A longer version of this article appears in nuClear News No.71 February 2015
