U.K. support for Electricite de France SA’s plan to build Britain’s first nuclear plant in a quarter century may distort the market, the European Commission said, in a threat to government plans for an atomic renaissance.
The U.K. offered a credit guarantee and so-called contract-for difference at a price of 92.50 pounds a megawatt-hour for 35 years at the Hinkley Point site, double today’s market rate.
Britain can legitimately argue that the cost and risk of a nuclear project is so large that the risk-taker must be given government guarantees and incentives over the long-term. On the flip-side it looks like another issue that is pushing Britain out of the EU. Energy Security in Britain is clearly not a shared policy as the EU would like it to be. It looks like a deal-breaker on EU membership unless a compromise can be negotiated. France is in a sticky situation because EDF is a French company; so let’s see how they handle “le compromise” when Mr Cameron meets Mr Hollande in the near future.