Westinghouse Hails EC Decision on State Aid for UK’s NPP Hinkley Point
Westinghouse Electric has welcomed the European Commission’s conclusion that the UK’s revised plan to subsidise the construction of a new nuclear power plant at Hinkley Point is in line with EU state aid rules.
The company said in a statement on Wednesday it recognized the important precedent set by the EU executive body for not just the UK but for all other EU nuclear projects.
“Westinghouse welcomes the opportunity for nuclear energy to compete on a level playing field with other low-carbon energy technologies with high upfront capital costs in the EU,” the company said.
Highlighting that EU has today recognized the importance of nuclear’s contribution to secure, affordable and low-carbon energy supply, Westinghouse Electric pointed out that any decision taken regarding Europe’s energy mix needs to consider the strong impact nuclear has on energy security, climate objectives and prices for both consumers and industry.
The company, part of Toshiba Corporation group, is the world's pioneering nuclear energy company and is a leading supplier of nuclear plant products and technologies to utilities throughout the world. Its technology is the basis for abouthalf of the operating nuclear plants worldwide, including more than half of those in Europe.
The European Commission, which had been examining whether the funding for the project broke state aid rules, said in a statement on Wednesday during the in-depth investigation the UK has agreed to significantly modify the terms of the project financing.
“As a result, the state aid provided will remain proportionate to the objective pursued, avoiding any undue distortions of competition in the Single Market. The modifications also reduce UK citizens' financial contribution to the project,” the EU executive body said
It added that the UK plans to establish a price support – the "contract for difference" - ensuring that the operator of the Hinkley Point nuclear plant will receive stable revenues for a period of 35 years. The operator will also benefit from a state guarantee covering any debt which the operator will seek to obtain on financial markets to fund the construction of the plant.
The new Hinkley Point C nuclear power plant will require debt financing of GBP 17 B (around EUR 21.6 B) and will eventually have a capital of about GBP 34 B. The construction costs are estimated at GBP 24.5 B.
Operations are scheduled to commence in 2023 with an expected operational lifetime of 60 years. The two reactors will produce in total 3.3 GW of electricity - the largest output from a single power plant in the UK and representing 7% of UK electricity generation.
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