* Investigation to focus on length, value, loan
* Uncertain how long process will take
By Foo Yun Chee and Karolin Schaps
BRUSSELS/LONDON, Dec 12 The European Commission
will open an investigation next week into planned British
support for a new nuclear power plant, three people familiar
with the matter said, in a precedent-setting case for future
nuclear funding in Europe.
Britain has offered EDF a price guarantee lasting
35 years on power from a plant which the French utility plans to
build in southwest England.
The European Commission's competition directorate will
investigate the length of the contract, the agreed minimum
electricity price and a government loan guarantee, one of the
"Britain says this (assistance) is necessary because it's a
nuclear project," the source said.
Britain is the first European member state to request
approval for government support for nuclear power. The
Commission's verdict is expected to determine how other states
regulate nuclear support in future.
The Czech Republic is also debating whether to guarantee a
minimum power price for state-owned utility CEZ to
help it expand its Temelin nuclear plant.
The British government in October agreed commercial terms
with EDF for the firm to build a nuclear plant at Hinkley Point
expected to cost 16 billion pounds ($26.2 billion).
One hurdle that remains before EDF makes a final investment
decision is the Commission's state aid approval.
"Looking at the overall timetable, we are confident it can
be done by the summer," a UK government source said.
Other sources said the timing was difficult to predict
because it is without precedent, but added that the Commission
had beefed up its staff dedicated to the case to speed up the
If the Commission refuses state aid approval, the Hinkley
Point project could fail, threatening the British government's
long-term energy and environmental plans which call for nuclear
"The project could not proceed," an EU diplomatic source
said when asked what would happen if the Commission rules
against the plan.
Another possibility is the directorate could call for
modification of the government's planned support, involving the
guaranteed price or the contract's length.
"I have no reason to believe the Commission will block it,"
British Energy Minister Michael Fallon said at a conference in
London earlier this month.
In October the Commission ruled out including a reference to
nuclear power in pending revised state aid rules in an
indication the British request could be difficult.
"Decisions like these are technical but also political,"
said Antony Froggatt, senior research fellow on energy at London
think tank Chatham House, hinting at political lobbying from
anti-nuclear nations, such as Germany and Austria, that is
likely to play a role in the Commission's decision-making.
After the Commission's investigation is launched next week
it will hold a public consultation and then present its decision
to the EU's commissioners.
Brussels-based lawyers have questioned whether Britain's
nuclear support scheme falls under current EU state aid