10 companies take legal action over EUR 100 billion Hinkley nuclear subsidies

The alliance, comprising ten green power suppliers and municipal utilities, is gearing up to file a plea for annulment at the European Union Court of Justice in Luxembourg, in response to the European Commission’s decision to subsidize the 3.2 GW Hinkley nuclear power station to the tune of GBP 92.50/MWh (around €120/MWh) for 35 years.

It will be represented by Dörte Fouquet, from law firm Becker Büttner Held. While Germany’s Ministry for Economic Affairs and Energy believes the chances of success are "low," Fouquet says the EC applied "an incorrect evaluation benchmark because these British subsidies are an unlawful State Aid and not an investment aid. Moreover … there is no general failure of the energy market which could justify these proposed subsidies."

According to calculations made on behalf of Greenpeace, the Hinkley Point C feed-in tariffs will amount to €108.6 billion, when inflation is taken into account (€53.7 billion without). This, along with credit guarantees worth over €20 billion made by the British Government, are threatening the renewable energy industry, says the alliance, which add that electricity prices will increase, thus, "massively" distorting competition.

"This high level of subsidization … means that Hinkley Point C can generate power at negative prices without suffering financial losses," writes Greenpeace. "Hinkley Point C lowers the wholesale price of power in the UK. Lower prices lead to an increased import of electricity from the UK to Germany. These imports lower the price of power in Germany, reducing the profits of its conventional and renewable power plants. This effect can lower the price of electricity in Germany by as much as 20 euro cents per megawatt-hour," it adds.

Achim Kötzle, executive director of energy management at Tübingen’s municipal utility, also part of the alliance, worries that the U.K.’s State Aid model will become widely accepted. There are signs in Poland, the Czech Republic and Hungary that this is happening, he says, speaking on behalf of eight municipal utilities, which does not bode well for Germany’s energy transition and decentralized energy supply; and impacts the economic and investment activities of municipal utilities.

The appeal is scheduled to be lodged within the next few days. Meanwhile, the German Bundestag will vote this evening on whether it should follow suit. Austria and Luxembourg have already taken action.

The alliance is comprised of power companies Greenpeace Energy, Energieversorgung Filstal, oekostrom AG, and the municipal utilities of Aalen, Bietigheim-Bissingen, Bochum, Mainz, Mühlacker, Schwäbisch Hall and Tübingen.