CYIL vol. 15 (2024)

EVELYNE AMEYE undertakings or certain sectors, (iii) distorts or threatens to distort competition, and (iv) is liable to affect trade between EU Member States. When applying these general state aid rules of the TFEU, the test is two-fold. First, the European Commission will assess whether state aid is available. Second, if there is state aid, the European Commission will assess whether such state aid is compatible with the TFEU. 4 4. The first limb of the test: is there state aid? When the European Commission applies its usual test to analyze whether there is state aid in the nuclear sector – i.e., there is aid if there is a transfer of state resources, providing a selective economic advantage that threatens to distort competition and has effects on trade - it focuses on the market economy investor principle (MEIP). According to the MEIP, if a private investor would have given the same support as the state to the nuclear project, there would be no state aid; however, if a reasonable private investor would not have acted in the same way as the state, there would be state aid. 5 5. The first limb of the test applied to Dukovany II . The transfer of state resources was crystal clear. 6 The Czech government acknowledged that the support measures to Dukovany II had been decided upon and were, therefore, imputable to the Czech State. Moreover, the aid would be financed from state resources: the state loan would be granted from the state budget, the safeguard mechanism would transfer risks to the state, and the power purchase agreement would be partly based on the state budget and implemented by a fully state-owned special purpose vehicle. Yet, as set out above, the MEIP is crucial when determining whether there is a selective economic advantage in nuclear investment projects. In that respect, the Czech government acknowledged that the envisaged measures aimed to enable an investment in Dukovany II that, due to specific risks and long project duration, would not have been undertaken by a private investor under normal market conditions. The European Commission went even further and found that the measures conferred a selective economic advantage both when considering them jointly and individually: the state loan would provide repayable financial assistance with low interest for Dukovany II (zero interest during the construction phase); the power purchase agreement would provide stable long-term purchase electricity prices that would not be available on the market (or at least not for such duration); and the safeguard measures granting protection in case of a change of Czech law or policy would transfer investment risks to the state, which is also an economic benefit that a private investor could 4 For a detailed analysis, see AMEYE E., ‘State Aid in the Nuclear Sector: What is the Legal Test?’ (2024) 45 European Competition Law Review 281. 5 For example, Commission Decision (EU) 2017/2112 of 6 March 2017 on the measure/aid scheme/State aid SA.38454 – 2015/C (ex 2015/N) which Hungary is planning to implement for supporting the development of two new nuclear reactors at Paks II nuclear power station (notified under document C(2017) 1486); https:// eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=OJ:L:2017:317:FULL. 6 European Commission’s Invitation to submit comments pursuant to Article 108(2) of the TFEU, “State Aid – Czechia State aid SA.58207 (2021/N) – Support for the construction and operation of a new nuclear power plant at the Dukovany site” (2022/C 299/02); https://eur-lex.europa.eu/legal-content/EN/TXT/ PDF/?uri=CELEX:52022XC0805(04), OJ of 5.8.2022, C 299/5, recitals (145) to (151).

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