Hinkley Point C Faces State Aid Legal Threat

Greenpeace has threatened the prospect of legal action if state aid is granted to enable French energy firm EDF (Paris: FR0010242511 - news) to build a new nuclear power station at Hinkley Point.

The environmental campaign group and green energy firm Ecotricity have published what they say is independent legal opinion that a package of support for the company from the French government would be against EU law.

A final investment decision on the £18bn Hinkley Point C project has yet to be taken, despite assurances from EDF that the Somerset plant will be built .

Funding appears to be the only issue delaying the start - with EDF Energy's chief executive telling MPs in March it had been a "long road" to clear regulatory and other hurdles and a positive decision would be taken "soon".

It (Other OTC: ITGL - news) is expected in May as cash talks continue in France. EDF has invested almost £2.5bn so far and is unwilling to write off that sum.

But Greenpeace and Ecotricity said they could go to court and lodge a complaint with the European Commission if the French state - a majority shareholder in EDF (Hanover: E2F.HA - news) - provides financial assistance.

The legal opinion, by competition and EU law barristers from Monckton Chambers, said reported refinancing plans for EDF were likely to be illegal unless they are approved by the Commission.

Dale Vince, Ecotricity founder, said: "Illegal state aid is one thing, and we'll work with Greenpeace to challenge that if it happens, but it's not just financial issues, there are technical problems with Hinkley Point too.

"EDF are yet to build one of these reactors and their first two attempts are, between them, sixteen years late and billions over budget."

EDF declined to comment.

Hinkley would be the first nuclear power plant to be built in Britain in two decades.

EDF is financing two-thirds of the project with the rest coming from Chinese investment.

The Chinese input has proved controversial in some quarters on security grounds while the Government's commitment to a new nuclear mix within the UK's energy future has also drawn sharp criticism on environmental and cost grounds.

Greenpeace has accused ministers of abandoning support for renewables "in favour of propping up an ailing state-owned nuclear industry in France."