Government's 'golden share' request could stall construction of Hinkley C nuclear plant

Exclusive: Opponents hope it could delay a project that is supposed to herald a new generation of British nuclear power plants

The Government is seeking European Commission approval to hold a “golden share” in EDF’s £24.5bn Hinkley Point C nuclear power station, which could have the effect of strengthening pending legal challenges against the plant’s construction.

European opponents of the plant, which would be the third at the site on the Somerset coast, have seized on the Government’s disclosure. They believe it dramatically alters the UK’s state aid case, meaning they could, at least, delay a project that is supposed to herald a new generation of British nuclear power plants.

Matthew Hancock, an energy and business minister, revealed in a Parliamentary answer that there had been “initial discussions” over a golden share, which would provide certain special voting rights. Theoretically, this could include blocking a change of ownership of Hinkley should the French company EDF ever be sold, or to ensure that the supply chain meets certain health and safety standards.

It was only in October that Brussels backed the UK’s proposal of guaranteeing a minimum price for the electricity bought from the new reactor – essential if EDF was to justify the huge investment to its shareholders. This guarantee would be in place for 35 years, after which the price should fall steeply.

But the anti-nuclear Austrian government is preparing to launch a lawsuit over what it believes is an unfair subsidy, a move that has sparked a diplomatic row, with the UK threatening counter-claims on other energy-related issues. Nuclear-free Luxembourg is expected to back Austria in a legal challenge that Hinkley’s critics believe would force EDF to abandon hopes of producing 7 per cent of the UK’s electricity from the site by 2023.

Separately, a German law firm, Beck Buttner Held (BBH), is representing a co-operative of energy suppliers and traders fighting the decision in a commercial action.

These are German-based, and were originally founded by Greenpeace, but there is a push to get smaller British renewable energy companies to join in, should they be able to show that EDF’s guaranteed price skews the market against them.

BBH partner Dorte Fouquet said Mr Hancock’s admission was a “very strange thing” and that it meant the initial state aid argument had not been “identified and clarified”. She believes it could even invalidate the European Commission’s decision to grant state aid approval.

In a Parliamentary answer to the Labour MP Paul Flynn, Mr Hancock said the Department for Energy and Climate Change (DECC) had started “initial discussions with the Commission on the possibility of a special (or “golden”) share for the Hinkley Point C project”. He added that any deal would be “fully compliant with existing EU legislation”.

A source close to the Government’s nuclear roll-out plans said it was “very puzzling” that this was “surfacing at quite so late a late stage in the process” and conceded it would be seized upon by Hinkley’s many opponents. However, the source argued that this was a “bog-standard” arrangement and would not have any practical impact on the state aid argument.

A DECC spokesman confirmed that negotiations over the golden share were “on-going”. Last month, EDF confirmed that an already-delayed final decision to build Hinkley C, which would be the first atomic plant since Suffolk’s Sizewell B came online in 1995, had been postponed until after the May election.

At the Ecobuild conference in London this week, Baroness Worthington, a shadow energy spokeswoman, warned that politicians had become “over-obsessed” with constructing Hinkley.

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