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28 Oct 2019, 13:36
Benjamin Wehrmann

EU state aid rules could frustrate German coal plant operators' compensation hopes – NGO

Clean Energy Wire

Compensating German coal plant operators for taking their facilities off the grid during the country's coal exit could violate EU state aid rules and therefore significantly reduce the amount the companies can hope for, according to a legal opinion written by lawyers of NGO Client Earth. "High compensation payments probably would not stand scrutiny under state aid rules," the NGO said. Energy company RWE has said it would claim up to 1.5 billion euros for every gigawatt of coal power capacity that it takes offline after a government-appointed commission in January recommended compensation payments for plant operators. Ida Westphal of Client Earth said that none of the 14 countries in the EU that already phased out coal power had voluntarily paid money to the coal companies for doing "the unavoidable”, as coal power's demise due to ecologic and economic reasons had been predictable for some time. Westphal said in order for a company to be eligible to receive state aid under EU rules it would have to prove that a shut-down would cause "significant" financial losses, which in light of the deteriorating economic situation of the lignite (brown coal) industry "will be hard to prove”. Client Earth's legal opinion found that most coal plants in the country are now older than 25 years and generally have long reached the break-even point for their operators. The NGO says that shutting plants down would actually shield the companies from losses, rather than causing additional costs.

According to an analysis by NGO Sandbag, Germany's fleet of lignite plants has likely lost more than 600 million euros in the first half of 2019, as profits “collapsed” and fixed costs could not be covered, ten times more than in the same period one year before. Germany is set to end coal-fired power production no later than 2038 and plans to shut down half the remaining capacity before 2030.

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