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Energy firm sues EU over Brit nuclear plant

Renewable energy provider Greenpeace Energy plans to sue the European Commission over its decision last year to allow the UK to build a new nuclear reactor.

Energy firm sues EU over Brit nuclear plant
Anti-nuclear demonstrators at Britain's Hinkley Point. Photo: DPA

The Hamburg company says that the huge subsidies involved in the UK project will upset German energy markets and harm small renewable energy providers, and argues that the  the European Commission (EC) should not have given the project the go ahead because the subsidies would distort competition.

Silvia Brugger, director of the Climate and Energy Programme at the Heinrich-Böll Foundation – closely linked to Germany's Green party – told The Local that the lawsuit is "justified" and an "important signal," and denied that a favourable ruling would threaten Germany's subsidy programme for renewable energy.

"[This process] should expose the full costs of nuclear energy and conversely highlight the competitive advantages of renewable energy," said Brugger.

As part of its strategy to reduce carbon emissions, in 2006 the British government announced plans to build the country's first nuclear power plant in a generation at Hinkley Point in southwest England.

Two new nuclear reactors were to be built at a cost of €40 billion and were supposed to be operational by Christmas 2017. But the project has been beset by problems and controversy, meaning it is now five years behind schedule.

Finally the government had to entice investors with €22 billion of subsidies and a guaranteed electricity price of €0.11 per kilowatt-hour – twice the current market rate.

Greenpeace Energy claims that these massive subsidies will push down energy prices across Europe, effectively reducing profits for renewable energy firms, which buy energy at a fixed rate from producers.

A spokesman for the company, Christoph Rasch, told The Local that the EC had taken its decision “without sufficient scrutiny” of its consequences for the European energy market and particularly for renewable energy.

"The studies we have commissioned show that a significant competitive disadvantage for us as a company in the electricity single market would develop," he said.

German taxpayer hit

The UK project may also cost the German tax payer due to the subsidy system Germany has put in place to reduce its carbon emissions.

Germany subsidises the difference between the market price of energy and the expensive production costs of renewable energy.

According to a report by think-tank Energy Brainpool, the Hinkley Point plant will undermine German energy prices, meaning the government will have to pay more to make up the difference.

The overall impact of the UK project would be small – €17 million out of a €20 billion fund for renewable energy.

But the fear is that the European Commission decision to allow the construction would encourage countries like Poland, Romania and Lithuania, which all have plans to invest in nuclear energy, to push on with their schemes and further destabilise the German renewable energy market.

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ENERGY

German government announces fresh relief package for high energy costs

With Russia's invasion in Ukraine exacerbating high energy and petrol prices, Germany is set to introduce a second relief package to limit the impact on consumers.

German government announces fresh relief package for high energy costs

The additional package of measures was announced by Economy and Climate Protection Minister Robert Habeck (Greens) on Sunday.

Speaking to DPA, Habeck said the wave of price increases throughout the energy sector were becoming increasingly difficult for households to bear.

“Extremely high heating costs, extremely high electricity prices, and extremely high fuel prices are putting a strain on households, and the lower the income, the more so,” he said. “The German government will therefore launch another relief package.”

The costs of heating and electricity have hit record highs in the past few months due to post-pandemic supply issues. 

This dramatic rise in prices has already prompted the government to introduce a range of measures to ease the burden on households, including abolishing the Renewable Energy Act (EEG) levy earlier than planned, offering grants to low-income households and increasing the commuter allowance. 

READ ALSO: EXPLAINED: What Germany’s relief package against rising prices means for you

But since Russia invaded neighbouring Ukraine on February 24th, the attack has been driving up energy prices further, Habeck explained.

He added that fears of supply shortages and speculation on the market were currently making the situation worse. 

How will the package work?

When defining the new relief measures, the Economics Ministry will use three criteria, Habeck revealed. 

Firstly, the measures must span all areas of the energy market, including heating costs, electricity and mobility. 

Heating is the area where households are under the most pressure. The ministry estimates that the gas bill for an average family in an unrenovated one-family house will rise by about €2,000 this year. 

Secondly, the package should include measures to help save energy, such as reducing car emissions or replacing gas heating systems.

Thirdly, market-based incentives should be used to ensure that people who use less energy also have lower costs. 

“The government will now put together the entire package quickly and constructively in a working process,” said Habeck.

Fuel subsidy

The three-point plan outlined by the Green Party politician are not the only relief proposals being considered by the government.

According to reports in German daily Bild, Finance Minister Christian Lindner (FPD) is allegedly considering introducing a state fuel subsidy for car drivers.

The amount of the subsidy – which hasn’t yet been defined – would be deducted from a driver’s bill when paying at the petrol station. 

The operator of the petrol station would then have to submit the receipts to the tax authorities later in order to claim the money back. 

Since the start of the war in Ukraine, fuel prices have risen dramatically in Germany: diesel has gone up by around 66 cents per litre, while a litre of E10 has gone up by around 45 cents.

READ ALSO: EXPLAINED: The everyday products getting more expensive in Germany

As well as support for consumers, the government is currently working on a credit assistance programme to assist German companies that have been hit hard by the EU sanctions against Russia.

As reported by Bild on Saturday, bridging aid is also being discussed for companies that can no longer manage the sharp rise in raw material prices.

In addition, an extension of the shorter working hours (Kurzarbeit) scheme beyond June 30th is allegedly being examined, as well as a further increase in the commuter allowance.

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