The state-guaranteed purchase price for a period of 35 years, Britain's state credit guarantee of up to £17 billion and the compensation in case of early closure of the plant all, in our view, contradict the requirements for a state aid approval.
The campaign against the UK's planned Hinkley C nuclear power station in Somerset went legal today with Austria filing its challenge to the UK's massive €108 billion support package for the project in the European court of Justice.
And the battle is a key one for nuclear power across Europe: if the Hinkley C package of subsidies, approved by the European Commission on 8 October 2014, stands, then it will be used to support the build of a dozen or more new nuclear plants in the UK, Poland, Czech Republic and Hungary.
Submitted by the Constitutional Law Department of Austria's Federal Chancellery, the lawsuit calls for the annulment of the Commission's decision that the UK government subsidy is lawful.
"State Aids are there to support new and modern technologies that are in the general interest of all EU countries", said Federal Chancellor Werner Faymann. "In no way is this is true of nuclear power!"
In particular, Faymann denies the Commission's reasoning that the aid would contribute to the promotion of an industry: "The state-guaranteed purchase price for a period of 35 years, Britain's state credit guarantee of up to £17 billion and the compensation in case of early closure of the plant all, in our view, contradict the requirements for a state aid approval."
Even if nuclear energy contributed to the UK's 'decarbonisation', he added, it is undisputed that the overall environmental impact of nuclear power plants is negative. "Therefore, the generation of nuclear power in preference to renewable energy sources is outside the terms of the Commission's environmental and energy aid guidelines.
"Nuclear power plants are dangerous, expensive, and compared to future technologies such as wind, water or solar energy neither economically nor ecologically competitive", he stressed.
Further legal challenges due from Green energy suppliers across Europe
In a separate move, an 'Action Alliance' of ten renewable energy suppliers and municipal utilities from Germany, and Austria are to file their own legal challenge against the UK's state support for Hinkley Point C.
Greenpeace Energy, Energieversorgung Filstal, Austrian energy producer oekostrom AG, and the municipal utilities of Aalen, Bietigheim-Bissingen, Bochum, Mainz, Mühlacker, Schwäbisch Hall and Tübingen are jointly challenging "subsidies amounting to more than one hundred billion Euros for a new build nuclear power plant."
A new study they commissioned shows that approval for Hinkley C, together with other proposed nuclear power plant projects in Europe, "could distort prices in Germany's electricity market by up to 12% and thereby massively distort competition."
In effect, they say, the heavily subsidised nuclear plants would have to 'dump' excess power on European power grids, forcing prices down and reducing the viability of clean power generation from renewable sources, also costing German taxpayers some €2.2 billion per year in additional support payments for renewable energy by 2040.
"If the State Aid model in Britain becomes accepted - and there are strong signals coming from Poland, the Czech Republic and Hungary on this - then it looks very bleak for Germany's energy transition and decentralised energy supply", says Dr Achim Kötzle, executive director of energy management at Tübingen's municipal utility.
The Commission's approval would send a "lasting a negative signal" to renewable generators and investors across Europe, he adds. "The European Commission's decision threatens to have negative consequences for our environmentally sound production plants."
Commission's decision was legally unsound
Dr Dörte Fouquet, partner at the international law firm Becker Büttner Held, who is representing the Action Alliance, believes the decision to approve the UK state aid to nuclear power was both wrong in law, and "not in the common interests of the European Union."
For instance, the Commission ignored the fact that there was no tendering procedure for Hinkley Point C; "the Euratom Treaty, which the Commission relied on for its argumentation, does not substantiate State Aid"; the Commission applied an incorrect evaluation benchmark because these British subsidies are a 'State aid' and not an 'investment aid'; and "there is no general failure of the energy market which could justify these proposed subsidies."
According to Greenpeace Energy's Michael Friedrich, "We are finalising legal documents and expect to be submitting the challenge later this week or early next week."
In filing its challenge, Austria faced off threats from the UK to take its revenge if the case went ahead. According to a leaked diplomatic memo, Foreign Ofice officials warned Martin Eichtinger, Austria's Ambassador in London, that
"The UK has obviously started systematically elaborating countermeasures that could be harmful to Austria ... Further steps and escalation ensuing the complaint are not to be ruled out."
Oliver Tickell edits The Ecologist.