Greenpeace announced today that they would seek an annulment of the European Commission's decision to approve the £50m rescue aid given to British Energy by the UK government late last year. If successful, this legal challenge could deal a fatal blow to efforts to rescue British Energy from falling into administration. The closure of British Energy's power plants may be the only legal solution to the crisis.
The Commission's decision, published 30 January 2003, concluded, in line with Greenpeace's arguments, that the UK had acted unlawfully in granting the loan without prior EC approval. Having examined the EC's decision Greenpeace has concluded that there are strong grounds to challenge this ruling.
- The decision was based on an erroneous assumption that failure to provide a loan facility would have led to an immediate and unplanned shut down of all British Energy's capacity.
- The decision fails to consider that the UK Government had options other than an 'all or nothing' bail out, covering all of British Energy's nuclear stations.
- The decision was based on factually inaccurate information, supplied by the UK government, about the contribution made by British Energy to security of energy supply.
Jim Footner of Greenpeace's Nuclear Campaign said, "The EC has approved a loan to British Energy which is unfairly distorting the UK electricity markets. Their reasoning is based on a misunderstanding of the facts and does not take into account the alternatives to this massive bail out of nuclear power. The only option that is clearly legal, fair to competitors and carries the lowest economic risk, is planned early closure of British Energy's nuclear power stations".
He continued, "At a time when new, truly clean technologies like wind and wave are crying out for more investment it is shocking that such massive volumes of public money should be poured into nuclear power's economic black hole".
"The bail out is clearly uncompetitive. Nuclear power is the weakest link in the energy sector, we should bid it goodbye".
Notes for editors:
Friday February 14th is the deadline for creditors and bondholders to agree to the British Energy restructuring package. The conditions for the loan require that Government present either a restructuring plan or liquidation plan to the EC by the 9th of March. If the loan is annulled British Energy would be forced into administration regardless of the status of any restructuring plan.
