european energy policy

The sun sets behind Hinkley Point B, and (R) Hinkley Point A nuclear power stations besides the Bristol Channel near Bridgwater on November 12, 2013 in Somerset, England (Photo by Matt Cardy/Getty Images)

  © Matt Cardy/Getty Images

The EU approval of the nuclear development at Hinkley Point marks an important, if not decisive, chapter in the story of new nuclear in the UK. There are still legal challenges to be overcome and a financing package to be finalised within the constraints set by the EU ruling but this is a good moment to identify winners and losers.

The obvious losers are the UK’s consumers who are trapped into paying a price for electricity that is double the current wholesale price for 35 years after the plant starts up. The deal will go down in history, alongside the privatisation of the Royal Mail, as an example of the inability of the British government – ministers and civil servants alike – to negotiate complex commercial deals. The phrase “rolled over” will enter the French language and be accompanied always with a Gallic smile. Still, one should recognise talent and so chapeau to the French negotiators. 

A 220-page document entitled “Commission Staff Working Document: In-depth study of European Energy Security” is hardly designed to be a best-seller. Few outside Brussels will read the European Commission paper in full, which is a pity because it is an excellent piece of work. It also provides the basis for a series of proposals contained in an accompanying document, which if accepted and carried through could create a common energy policy for the EU comparable in scale, scope and cost to the Common Agricultural Policy

What happens now for the numerous companies, led by the oil majors, who have chosen to invest in Russia? The surprising answer may be that the short-term risks are less serious than the longer term prospects of disengagement as energy consumers, especially in Europe, reduce their dependence on a supplier they do not trust. 

Energy policy is a serious problem which won’t be solved by gimmicks or slogans. Most of the debate in the UK over the last few weeks has focused on the prices being paid by domestic consumers. Now, though, the focus is set to shift to the competitive burden on businesses and jobs not just in the UK but across Europe. With yet more price increases to come, the need for a new and serious policy covering both supply and demand is becoming urgent.