* EU to assess if plant can be built without UK government
* Britain confident investigation over by summer
* EDF working with Chinese nuclear companies on project
BRUSSELS, Dec 18 European Union state aid
regulators launched on Wednesday an investigation into proposed
British support for a 16-billion pound ($26 billion) nuclear
power plant to be built by EDF, saying they had doubts
the project needed help.
Britain has offered EDF a price guarantee lasting 35 years
on power from a plant which the French utility plans to build at
Hinkley Point in southwest England, but the support mechanism
needs state aid approval from the European Commission.
"The Commission has doubts that the project suffers from a
genuine market failure," the executive said in a statement,
adding it would seek public feedback on the case because of its
unprecedented nature and scale.
Britain is the first European member state seeking state aid
approval for a nuclear support scheme.
If the Commission rules that the mechanism does not comply
with EU state aid rules, the project is unlikely to go ahead.
"We will use this period to demonstrate how the project
meets state aid rules and provides good value for consumers
while cutting carbon in the energy sector," said Britain's
Secretary of State for Energy and Climate Change, Edward Davey.
He added that opening investigations was standard procedure
for the Commission when assessing large investment projects and
that it was always expected as part of Hinkley Point's approval
"It is right that the European Commission should examine the
contract and highlight potential challenges," said EDF Energy,
the French firm's UK subsidiary, in a statement.
The Commission will assess whether the nuclear plant can be
built without government support and also investigate Britain's
plan to back EDF's loans with a state guarantee and the
electricity price level agreed in the contract, the Commission
The EU's Competition Commissioner Joaquin Almunia told
reporters on Wednesday that the executive was not under any
legal time pressure to complete the investigation.
"The investigation depends on how complicated it is. This is
not exactly the simplest investigation," he said.
A British government source said last week Britain was
confident the investigation could be ready by the summer.
EDF has signed preliminary agreements with Chinese
investment partners China General Nuclear Corporation (CGN) and
China National Nuclear Corporation (CNNC) who will together own
30-40 percent of the project.
French reactor designer Areva will hold a 10
percent stake in the plant.