The EU has drawn up plans to change state aid rules to make it easier for member countries to subsidise nuclear power, in a move that looks set to trigger a political row across the continent.By exempting all nuclear projects from the general restrictions on state aid – subject to certain conditions – the EU’s competition commission will prompt relief in UK and France but fury in Germany and Austria.
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Nuclear companies can already apply for exemptions from state aid rules on a case-by-case basis.Under the proposals, countries would be allowed to use state aid for projects to address “market failure” as long as this is through a time-limited mechanism not offering more than a “reasonable rate of return”.
The decision will be welcomed in Britain, where the government is offering various support mechanisms, including a guaranteed price for nuclear power and a financing “guarantee” to try to get a wave of new reactors built by the private sector.
EDF, the French energy giant, is locked in talks with the UK Treasury over a price mechanism for energy from its proposed reactor at Hinkley Point in southwest England.
Yet Angela Merkel, the German chancellor, said on Friday she still supported her country’s resistance to any chance in the state aid rules to favour nuclear.
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A spokesman for Joaquín Almunia, the competition commissioner, said the paper was a “preparation document for a public consultation” and admitted it was not due to be published until after the German elections in September. He said the changes were designed to lead to clearer EU guidelines rather than making it easier to subsidise the industry.“The European Commission does not in any way want to encourage subsidies to nuclear power,” he said. “However, it appears that some member states do wish to subsidise nuclear power.”
The leaked document suggests that aid should only be granted in a “genuinely competitive bidding process”. It also suggests that any state support should be designed so that it can be adjusted, with some kind of “clawback of excess aid” if market circumstances change.
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