The European Commission has approved, under EU State aid rules, a €300 million French measure to support Electricité de France's (EDF) subsidiary Nuward in researching and developing small modular nuclear reactors ('SMRs'). The measure will contribute to the achievement of the strategic objectives of the European industrial strategy and the European Green Deal.
The French measure
France notified to the Commission its plan to grant €300 million to Nuward to support its research and development (R&D') project on SMR technology.
The project aims to develop processes for the design and construction of SMRs based on a simple and modular design and with a power output equivalent to or less than 300 MWe. The front-end design is the third phase of the overall Nuward project, which contains five distinct phases. In December 2022, the Commission already approved a €50 million French measure to support the second phase of the project, aimed at acquiring new knowledge for the design and construction of SMRs.
Under the measure, the aid will take the form of a direct grant of up to €300 million that will cover the R&D project until early 2027.
The measure will support Nuward in sizing the modules and components of the SMRs and validating their integration in the SMRs by means of numerical simulators and laboratory tests. Nuward will also carry out industrialisation studies relating to the modular design and mass production of SMRs. Finally, the measure will also support Nuward in the preparation of the required safety demonstrations for the approval of the project by the national nuclear safety authorities.
The Commission's assessment
The Commission assessed the measure under EU State aid rules, in particular Article 107(3)(c) of the Treaty on the Functioning of the European Union ('TFEU'), which enables Member States to support the development of certain economic activities subject to certain conditions, and the 2022 Framework for State aid for research and development and innovation ('RDI Framework').
The Commission found that:
- The measure facilitates the development of an economic activity, in particular R&D activities for the development of the SMR technology.
- The aid has an 'incentive effect', as the beneficiary would not carry out the investments in R&D activities for SMRs without the public support.
- The measure is necessary and appropriate to promote the relevant R&D activities. In addition, it is proportionate, as the level of the aid corresponds to the effective financing needs.
- The measure has sufficient safeguards to ensure that undue distortions of competition are limited. In particular, the supported R&D activities will focus on technologies that are not immediately marketable, occurring at a very advanced stage, and ready for industrial deployment only in the long term.
- The aid brings about positive effects that outweigh any potential distortion of competition and trade in the EU.
On this basis, the Commission approved the French measure under EU State aid rules.
Background
The RDI Framework sets out the rules under which Member States can grant State aid to companies for RDI activities, while ensuring a level playing field.
The RDI Framework aims at facilitating research, development and innovation activities, which, due to market failures, would not occur in the absence of public support. It enables Member States, subject to certain conditions, to provide the necessary incentives to companies and the research community to carry out these important activities and investments in this field. The RDI Framework applies the principle of technological neutrality and thus relates to all technologies, industries and sectors to ensure that the rules do not prescribe in advance which research paths would result in new solutions for innovative products, processes and services.
The Commission recognised the potential contribution of SMRs to achieving the energy and climate objectives of the European Green Deal in its recommendation of February 2024 for a 2040 emission reduction target /, which underlined that all zero and low-carbon solutions will be needed to reach the EU's climate neutrality objective by 2050. The Commission is working on establishing a new European Industrial Alliance to facilitate and accelerate the development, demonstration and deployment of SMRs in Europe by the early 2030s, and recently launched a call for membership.
The non-confidential version of today's decision will be made available under the case number SA.106964 in the State aid register on the Commission's competition website once any confidentiality issues have been resolved. New publications of State aid decisions on the internet and in the Official Journal are listed in the Competition Weekly e-News.
