Euro chiefs approve nuclear group's multi-billion deal
The European Commission today approved multi-billion-pound British government aid for a sweeping British Energy restructuring plan.
Clearance of the accord paves the way for the nuclear group’s survival, the Commission said in a statement.
The exact scale of the aid is not known because of the complexities of the massive plan for the decommissioning of nuclear power plans, said a Commission spokesman.
But Brussels is satisfied with the terms of the government subsidy, which has to be cleared by the Commission under EU rules on fair industrial competition.
British Energy ran into major financial difficulties in 2002, prompting the offer of a government bail-out package put by some at about £4bn (€5.8bn).
The aim is to pay for continuing operating costs and for the bulk of the huge nuclear decommissioning plan.
After declaring the state aid in line with EU rules, competition commissioner Mario Monti said: “Today’s decision demonstrates the Commission’s ability to apply competition rules in newly-liberalised energy markets with great success.
“The outcome of this case takes full account of the comments made by British Energy’s competitors and the need to ensure security of supply at all times.”
British Energy operates eight nuclear power stations in the UK – two of them in Scotland – and is Britain's only private nuclear power station operator. It also supplies electricity on the UK wholesale market.
The company’s financial troubles were triggered by a steep fall in UK electricity prices and the Commission is happy for British government backing to keep BE afloat – as long as the aid is exclusively used for decommissioning.
The government welcomed the decision but Green politicians were furious.
Claude Turmes, a Luxembourg member of the European Parliament said: “This (approval of the government aid) will cause not only an enormous distortion and unfair competition in the UK market but also will set a precedent for the entire European energy market.
“It will also create a special protection zone for nuclear power from which the other energy sources are excluded.”
Under today’s agreement BE will have to cap its production capacity, including nuclear capacity, for six years.
The company will also be barred from undercutting prices that its competitors who lack state aid are unable to afford in the sales sector to large business customers.
The British government rejects suggestions that the aid amounts to cash to prop up a lame-duck business.
Today’s agreement on a restructuring package will restore BE to viability, said a spokesman.
No firm cash figure was placed on the level of aid approved because, according to the government, it is not possible to predict accurately the precise level of historically-incurred nuclear liabilities – and the restructuring and decommissioning will last for many decades.
