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Ecotricity boss Dale Vince
Ecotricity boss Dale Vince says: 'The financial support agreed for Hinkley would be an enormous burden for the country.' Photograph: Richard Saker Photograph: Richard Saker
Ecotricity boss Dale Vince says: 'The financial support agreed for Hinkley would be an enormous burden for the country.' Photograph: Richard Saker Photograph: Richard Saker

Ecotricity considers legal challenge over EU go-ahead for Hinkley Point C

This article is more than 9 years old
Energy supplier joins growing number of firms and organisations seeking to block planned subsidy scheme for new nuclear plant

Independent energy supplier Ecotricity is among companies and organisations considering a legal challenge against the European commission decision to give approval to Hinkley Point C nuclear plant.

Austria has already promised to fight the decision in the courts but Dale Vince, the founder of Ecotricity, said he might stand as an “interested party” in the European court of justice to block the planned subsidy scheme for the £24bn project in Somerset.

“This is a mad decision by Brussels and a patriotic issue for us. The financial support agreed for Hinkley would be an enormous burden for the country and there is the costs of decommissioning on top of that. Where is the money going to come from?” said Vince, whose company builds windfarms as well as supplying gas and electricity.

Jeremy Leggett, who founded Solarcentury, also voiced his dismay. “The days when the nuclear industry could impose whatever tilted playing field it wanted on renewables are gone,” he said. “They are dealing with huge global industries now that last year put more generation capacity online globally than all fossil fuels and nuclear combined. These are not likely to soak up nuclear nonsense without a fight any more.”

Ecotricity builds windfarms and Solacentury installs solar panels. Both are worried that the government has capped the amount of money being made available for low-carbon generators. They fear that nuclear will suck up most of the available money.

Paul Dorfman, a senior research associate at the Energy Institute at University College, London, said there was a groundswell of opinion among renewable energy companies and associations in Britain and Europe that something should be done: “We are profoundly disappointed that the outgoing European commission administration has decided to rush through this decision to approve state aid to Hinkley Point C without giving the new commission the opportunity to review and reflect on a decision which will set a significant precedent on energy and competition policy. That this decision has been taken in undue haste only strengthens the grounds for and likely success of a legal challenge.”

The commission announced last Wednesday that it was convinced by arguments from the UK government that the “contracts for difference” aid scheme was justified to encourage EDF of France to construct the new atomic plant. The Department of Energy and Climate Change (DECC) has agreed that EDF will be able to obtain £92 per megawatt hour – double the current cost of energy – over a 35-year period. The money will be recovered via energy customers’ bills but the length of the contract is much more generous than anything agreed for wind or solar power.

Ed Davey, the energy and climate change secretary, described the Brussels decision as an important step on the road to Britain’s first new nuclear power station and insisted it was a good deal for consumers.

“While there is much work still to do before a final contract can be signed, today’s announcement is a boost to our efforts to ensure Britain has secure, affordable low carbon electricity in the 2020s,” he said.

DECC argues that rising gas and carbon prices will make nuclear power a future good bet for consumers at a time when old coal and atomic stations are coming off line owing to old age or other reasons.

The decision to give the green light to Hinkley surprised many, as in January the European competition commissioner, Joaquín Almunia, who retires on 1 November, had earlier overseen a heavily critical report on the subsidy arrangements proposed by DECC. But he said he had changed his minds after making some changes to the original proposal.

EDF says it can build Hinkley Point for £16bn. But the European commission says the cost by the time it is meant to become operational in 2023 is more likely to be £24bn.

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