Molly makes important announcement to media

Molly makes important announcement to media

Greens in Europe are to refer back the decision on the funding for Hinkley C to the EU Commission.  They will ask Margrethe Vestager, Commissioner in charge of competition, to revisit the decision in light of the news that the Government is seeking a “golden share” in the project and the likely pull-out of Areva, the French-owned company with a 10% stake.

Greens argue that the deep uncertainty and confusion around the financing of Hinkley means fundamental changes to the terms of the agreed state aid and that the deal must now be referred back. Molly Scott Cato said:

“The total shambles over funding for Hinkley [1] explains why the deal was not signed at the end of February as previously agreed. It is now clear that there are fundamental changes to the basis on which the state aid determination was made by the Commission in October 2014. For this reason Green MEPs are today calling on Commissioner Vestager to re-examine the decision reached by her predecessor, Mr Almunia.”

The announcement that Greens were to refer the decision back to the Commission was made at a conference in London on Hinkley and nuclear at which a panel of energy experts and Green MEPs ‘dismantled’ arguments for nuclear being a sustainable energy source and made a strong case for renewables providing the UK’s energy needs [2]. Claude Turmes, Green MEP from Luxembourg, a country that has joined Austria in a legal challenge against Hinkley, said:

“Recent studies show the huge levels of public funding that nuclear energy is benefiting from. We call on Commissioner Vestager to open a broad sectoral investigation on state aid in the nuclear sector. We need to ensure that all external costs related to decommissioning and waste management are no longer a debt for future generations of taxpayers but borne by the nuclear industry.”

Notes

[1] Hinkley’s catalogue of financial troubles

  • Financing is 45-50% EDF, 10% Areva, 35-40% Chinese state investors. Areva are also responsible for the design

  • Cost of Hinkley: early reports of £16bn have now gone up to ‘as high as £34bn

  • French-owned generator and supply company EDF reported a 25% slump in operating profits for 2014 to £863m, which it blamed on ‘challenging market conditions’.

  • Areva have reported record losses of €4.9bn amid cost overruns at its reactor in Finland and a downturn in global demand for nuclear power stations after the Fukushima disaster in Japan.

  • In February Areva announced plans to cut 15% of its wage bill to save €300m a year within three years amid worsening sales prospects for its reactors.

  • There is growing speculation that Chinese investors are hardening the terms under which they would be willing to help underwrite some of the cost of the new plant.

  • Anticipating the withdrawal of Areva, EDF are talking to other potential investors to make up the 10% shortfall (eg Saudi Arabian investors). Whoever makes up this 10% it will change the terms of the agreed state aid.

[2] See Twitter: #Sinkley

 

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