By Kate Abnett and Foo Yun Chee BRUSSELS, March 24 (Reuters) - EDF is set to face an EU investigation into a state aid package for building six nuclear power plants over concerns the support will
EU Launches Probe into French State Aid for EDF’s Six Nuclear Plants
EU Investigation into French State Aid for EDF
By Kate Abnett and Foo Yun Chee
Background of the State Aid Package
BRUSSELS, March 24 (Reuters) - EDF is set to face an EU investigation into a state aid package for building six nuclear power plants over concerns the support will reinforce the state-owned French utility's market dominance, people with direct knowledge of the matter told Reuters.
The scheme, worth tens of billions of euros, is central to France's plan to renew its ageing nuclear fleet, and would add about 10 gigawatts of capacity, with the first reactor due to be commissioned in 2038. A lengthy EU investigation would risk delaying that timeline.
Timeline and Approval Process
The European Commission - the EU competition enforcer - is expected to open an investigation next month, the people said.
France put in a request late last year for Brussels to approve the state support, which includes a subsidized loan covering at least half of the construction costs of the six nuclear reactors.
Implications for France’s Energy Sector
The new plants would replace old nuclear plants and secure future energy supplies to cover rising demand over the next decade, driven in part by the energy needs of data centres.
Concerns Over Market Dominance
EU regulators want more time to look into the complex undertaking, one of the country's biggest public projects in years, the people said.
Brussels is concerned that the six new power plants would further entrench state-owned and dominant energy player EDF's market share. The company already holds more than 75% of France's net electricity production.
Competition and Market Entry
Bolstering EDF's market share may distort competition and preclude new players from entering the market, one of the sources said, citing the Commission's concerns.
The Commission, the French Energy Ministry and EDF declined to comment.
Financial Aspects and Legal Challenges
The project announced in 2022 is now estimated to cost 72.8 billion euros ($84 billion) in 2020 values.
Potential Legal Challenges
An in-depth EU investigation would also allow the Commission to build an ironclad case in the event that Austria's government - which is opposed to nuclear power - launches a legal challenge against the Commission's approval of the deal, which some EU officials deem likely, one of the people said.
Vienna has previously challenged state aid for nuclear projects in Hungary and former EU member Britain.
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(Reporting by Foo Yun Chee and Kate Abnett, additional reporting by Forrest Crellin and Leigh Thomas in Paris; editing by Andrei Khalip)
