Austria Sues EU over UK Nuclear Plant

Austria launched legal action on Monday against the European Commission over its backing of British plans for the $24.9 billion development of the Hinkley Point nuclear power plant, Chancellor Werner Faymann said.

The project, to be built by French utility EDF at Hinkley Point in southwest England, is crucial for Britain's plan to replace a fifth of its ageing nuclear power and coal plants over the coming decade while reducing carbon emissions.

France sees Hinkley Point as a major export contract that will boost its nuclear industry.

However, Austria, which prides itself on supporting clean energy and does not have nuclear plants, says the Commission decision goes against the EU's aim to support renewable energy.

"Subsidies exist to support new and modern technologies which are in the interest of all EU states. This does not apply in any way to nuclear power," Faymann said in a statement.

"Nuclear power plants are dangerous, expensive and -- compared with ... wind, hydro and solar energy -- neither economically nor ecologically competitive," he added.

The Commission approved the British plan to guarantee the price of power from its first new nuclear project in decades last October, despite strong opposition from some Commissioners.

Greenpeace and nine German and Austrian utilities selling renewable energy have also said they are launching legal action against state aid for Hinkley Point.

In a majority of cases, the European Court of Justice in Luxembourg has found in favour of the Commission in complex cases.

Jeremy Wates, the head of European Environmental Bureau, an umbrella group for environmental bodies across the EU, described the European Commission's decision as "deeply misguided".

"We expect the courts to follow the law and oppose this kind of subsidy, twice the current price of electricity, which will be costly for consumers," he said in a statement.

The British government played down the legal threat.

"The UK is confident that the European Commission's State aid decision on Hinkley Point C is legally robust and has no reason to believe that Austria has submitted a challenge of any merit," said a spokeswoman for Britain's Department of Energy and Climate Change said.

Reporting By Shadia Nasralla, Barbara Lewis and Karolin Schaps