LUXEMBOURG, July 12 (Reuters) - Europe's second highest court rejected Austrian concerns about a planned nuclear plant in Britain, saying British government aid offered to the project did not violate EU rules.
French electric power utility EDF and China General Nuclear Power Corp are building the Hinkley Point nuclear plant in western England, which has been hit by delays and cost estimates overruns.
The European Commission cleared the 18 billion pound ($23.8 billion) project in 2014, one of the world's costliest, saying it did not see any competition issues.
However, a previous Austrian government took issue with the decision and took its case to the General Court, arguing that it contradicted EU policy of supporting renewable energy.
Luxembourg has also challenged the approval, backed by a group of more than 20 academics, politicians and renewable energy officials who say it distorts competition and flouts rules on government subsidies.
Another contentious issue is the guaranteed price for electricity from the plants which is higher than market rates.
The General Court dismissed Austria's arguments against the project.
"The General Court confirms the decision by which the Commission approved the aid provided by the UK in favour of the Hinkley Point C nuclear power station," judges said.
They said Britain has the right to choose between the different energy sources.
"The Commission did not err in taking the view that the UK was entitled to define the development of nuclear energy as being a public-interest objective, even though that objective is not shared by all of the member states," the court said.
In addition, EU regulators were correct to allow British state aid for the project because of the lack of market-based financial instruments and other contracts to hedge against the substantial investment risks in the project, it said.
The case is Case T-356/15 Austria v Commission.
($1 = 0.7564 pounds) (Reporting by Francois Aulner, writing by Foo Yun Chee; editing by Robert-Jan Bartunek/Keith Weir)