The European Commission has launched the next stage of its investigation into the agreement for Hinkley Point C. This announcement shows that the inquiry is proceeding as expected and in time for a decision in the summer of 2014.
The Contract for Difference for Hinkley Point C will be the first example of a new kind of agreement to unlock the investment needed for low carbon energy at the best possible price for consumers.
As part of a far-reaching reform of the UK energy market, it is right that the European Commission should examine the contract and highlight potential challenges.
EDF Energy is looking forward to engaging fully with the Commission and interested parties during the course of the investigation.
This investigation gives the Government and others the opportunity to show that Electricity Market Reform in the UK is essential to deliver the investment needed for the country’s low carbon energy future at a price that is fair for customers. Without this reform, the investment will not take place. The Hinkley Point C agreement is proof that this reform works to attract the investment needed to secure Britain’s future electricity supply.
The European Union has made decarbonisation a priority and the UK has an obligation to reduce dependence on fossil fuels by increasing the use of low carbon technologies. Electricity Market Reform is designed to achieve that and it does so without offering any special treatment for nuclear power.
Decisions both to reform the energy market and to back new nuclear and other low carbon technologies have enjoyed cross party support and are the result of thorough consultation and democratic examination. Today’s announcement comes as the Energy Bill achieves Royal Assent after a year of democratic scrutiny.
EDF Energy said in October that the agreement for Hinkley Point C would need state aid approval before a final investment decision can be taken.
The Government has also confirmed that Hinkley Point C is eligible for the UK Guarantees Scheme. The Guarantee will be charged at commercial rates in line with state aid rules.
The length and intensity of the negotiations has resulted in a fair and balanced agreement which saw the project and its costs opened to independent validation on behalf of the Government. Potential suppliers were selected following an open and competitive process.
The scrutiny applied to the project at every stage ensures that agreements reached are durable and robust and are compliant with state aid requirements.