European Commission clears EDF, CGN partnership
11 March 2016
The European Commission has announced its approval of the partnership between EDF and China General Nuclear (CGN) for the development, construction and operation of three new nuclear power plants in the UK. The partnership complies with EU merger regulations, it said.
Under the Strategic Investment Agreement signed last October, CGN agreed to take a 33.5% stake in the Hinkley Point C project in Somerset, as well as for the joint development of new nuclear power plants at Sizewell in Suffolk and Bradwell in Essex. The Hinkley Point C and Sizewell C plants will be based on France's EPR reactor technology, while the new plant at Bradwell will feature CGN's Hualong One design. The partnership is to be implemented through three joint ventures respectively responsible for development, construction and operation of the plants.
The European Commission (EC) has now announced that the planned partnership meets EU merger regulations.
Competition in the UK's wholesale electricity market "will not be hindered by the transaction given the moderate market share of EDF, the very limited market shares of CGN in this market and the presence of other competitors", the EC said.
It also considered the "vertical link" between CGN's reactor supply activities and the future joint ventures' activities in generation and wholesale supply of electricity. EDF also owns other sites considered suitable for building new nuclear power plants. The EC said it raised no concerns on these points "in view of the presence of other players on these markets".
"As regards the other nuclear-related markets where CGN and other Chinese State-owned companies are active (such as instrumentation and control systems, nuclear construction services, etc) and which are upstream to the joint ventures' activities, the commission found that the parties would not have the ability to shut competitors out of these markets," the EC said. It added, "The transaction only concerns the UK market and CGN and other Chinese State-owned companies are barely active in these markets in the European Economic Area and have moderate market shares globally."
EDF Energy said it welcomed the EC's decision. The approval is "a positive step for the Hinkley Point C project" and "shows that the robust agreements underpinning the project continue to pass independent scrutiny," the company said.
In a 3 March joint statement from the British and French governments, they "welcomed the major progress made in recent months with a view to confirming the project to build two EPR reactors on the Hinkley Point site". The statement noted the "significant milestones" of the signing of the framework agreement between EDF and CGN and the state aid approval by the EC of the methodology underpinning the waste transfer contract between EDF Energy and the UK government.
"EDF is currently devoted to preparing all the necessary elements for the announcement of a final investment decision for Hinkley Point C in the near future, with the full support of the French government," the statement said.
Researched and written
by World Nuclear News