Monday, 18 May 2015

Tory bill to end windfarm subsidies likely to undermine EU approval for state aid to Hinkley C

Conservative efforts to 'end subsidies' for onshore windfarms seem likely to undermine EU state aid approval for Hinkley C. This is because the EU Commission's judgement was based on evidence submitted to the Commission which said that the state aid to nuclear was justified because similar support was available to other renewable and low carbon generators. Clearly if onshore wind is barred from enjoying the same sort of support (that enables it to be constructed) as nuclear power this argument no longer applies. Many will now argue that the (already highly controversial) Commission decision to allow state aid for Hinkley C be struck down for this additional, very important, reason.

In their consideration of the evidence submitted by the UK Government the European Commission stated that:
'(282) The UK submitted that;......

(284) The aid would not have a negative impact on other low-carbon sources, given that they are also supported by the UK, and there is no discrimination against renewable technologies. The aid would actually support investment in a broad range of energy initiatives...' 

But now, Amber Rudd,  the new Conservative Secretary of State for Energy and Climate Change has announced that she will ensure that legislation will be introduced next year to end 'subsidies' for onshore windfarms. See

So, it seems clear that the Commission's judgement giving consent to Hinkley C was based on a claim by the UK Government which cannot (now) be reasonably said to apply when Hinkley C starts generating and therefore gets paid its state aid incentives (2023???). If onshore wind is no longer able to be given reasonable CfDs (contracts for difference) that allow it to be built then clearly the aid to Hinkley C would be discriminating against a very important renewable energy technology, namely onshore wind. Hence the logic upon which the Commission gave its consent no longer applies. This will add considerable weight to the efforts to appeal against the Commission decision.

Austria and Luxembourg are said to be launching appeals against the Commission's decision to grant state aid permission to Hinkley C nuclear power station.

1 comment:

  1. Agree fully. The position of Her Majesty's Government is looking more shaky by the day.

    It's no longer just onshore wind either, Amber Rudd announced earlier this week that the government "does note want large scale solar" and today said the offshore wind industry must come off subsidies by the 2020s.

    Yet Hinkley will get support under CFDs from 2023, if EDF even manage to stick to the wildly optimistic timetable!