The European Commission (EC) has opened an in-depth investigation to assess whether public support that France plans to grant for the construction and operation of six new nuclear reactors is in line with EU State aid rules. France and interested third parties will be given the opportunity to submit comments.
In November 2025, France notified the Commission of its plan to support the construction and operation of six new nuclear reactors with a total electricity generation capacity of 9,990 MWe. The six new EPR2 reactors will be built in pairs at the existing Penly, Gravelines and Bugey NPP sites. The new units are planned for commissioning between 2038 and 2044, and to have a lifetime of 60 years each. The total construction costs are currently estimated at €72.8bn ($83.7bn).
In March, France’s 5th Nuclear Policy Council (CPN – Conseil Politique Nucléaire) confirmed the main principles and parameters of the financing and regulatory plan for the EPR2 programme. Beyond the initial six reactors, the Council officially requested EDF to submit preliminary studies by the end of 2026 for an additional eight EPR2 units. The first reactor at Penly is scheduled for commissioning in 2035-2037. This came after President Emmanuel Macronin February 2022 announced that the time was right for a nuclear renaissance in France. He said operation of all existing reactors should be extended without compromising safety and he outlined the proposed EPR2 programme.
According to the EC, the project aims to increase the security of electricity supply for France and for neighbouring countries, as well as to contribute to EU decarbonisation targets. The beneficiary of the support is Électricité de France (EDF), the owner and operator of the French nuclear fleet, and a Special Purpose Vehicle, fully owned by EDF, will be set up to carry out the project.
France plans to support this project through three measures:
- a subsidised loan at a preferential rate, covering 60% of the estimated construction costs;
- a two-way contract for difference running for 40 years to provide stable revenues to the plants;
- a risk-sharing mechanism with a specific list of events, in order to provide protection against risks outside EDF’s control, such as unforeseeable natural disasters and changes in national law.
The EC noted: “At this stage, based on its preliminary assessment, the Commission has found the project necessary and considers that the aid facilitates the development of an economic activity. The Commission also recognises the potential contribution of the project to security of supply and decarbonisation. Nevertheless, the Commission considers it necessary to assess whether the measure is fully in line with EU State aid rules.”
For this reason, the EC decided to open an in-depth investigation in relation to:
- The appropriateness and proportionality of the aid package. Since there are several aid measures that can limit the risk for the beneficiary, it is important to ensure that aid is limited to what is strictly necessary. “In particular, the Commission has doubts on whether the proposed package achieves an appropriate balance between reducing risks to enable the investment and maintaining incentives for efficient behaviour, while avoiding excessive risk transfer to the State.”
- The impact of the measure on competition in the market and whether this is kept to the minimum. “In particular, the Commission has concerns that the measure may consolidate or indirectly reinforce EDF’s market power. The Commission will also investigate whether there are sufficient safeguards to ensure that EDF’s trading strategy will not lead to market distortions, and to prevent that aid is transferred to specific market participants.”
- The compliance with other provisions of EU law, in particular with the design principles set out in the Electricity Regulation.
Based on previous EC decisions for similar nuclear projects and the specific concerns raised in the current probe, it is likely that approval for France’s six-reactor plan will be conditional. The EC typically imposes structural and behavioural remedies to prevent state aid from unfairly distorting competition or entrenching a state-owned operator’s market dominance.
Based on the Commission’s opening statement and historical precedents like Hinkley Point C in the UK and Paks II in Hungary, a number of conditions are possible.
Market Liquidity Requirements: To prevent EDF from hoarding the electricity generated, the EC may require a significant percentage (typically 30% or more) of the output to be sold on open, transparent power exchanges rather than through internal EDF channels.
Profit-Sharing (Gain-Share) Mechanisms: If the reactors become more profitable than expected (possibly due to high electricity prices), the EC often mandates a mechanism where excess profits are returned to the state or used to reduce the subsidy, ensuring the aid remains proportionate.
Strict Structural Separation: The EC has expressed concerns about reinforcing EDF’s market power. It may require the new reactors to be managed by a functionally and legally independent entity from EDF’s existing generation fleet to ensure fair competition.
Operational Incentives: Regulators want to ensure the Risk-Sharing Mechanism does not remove EDF’s incentive to operate efficiently. Conditions may be added to cap the amount of risk the state can absorb for construction delays or cost overruns.
Procurement Transparency: Following an EU Court ruling in September 2025 that annulled a previous nuclear aid decision related to Paks II due to procurement flaws, the EC will likely impose strict oversight on how construction contracts are awarded to ensure they follow EU public tender rules.
