Germany's RWE could receive two billion euros in compensation for coal exit – media reports
Rheinische Post / Reuters
German energy company RWE could receive up to two billion euros in compensation for its lignite operations under a coal exit agreement currently drawn up by the economy ministry, reports the Rheinische Post based on political party sources. The company and conservative (CDU) minister Peter Altmaier are largely in agreement, and additional millions of euros in transition funds are earmarked for RWE workers who lose their jobs, according to the article. Negotiations with Czech energy holding EPH are more difficult, however, as the company that owns eastern German lignite operations is asking for significantly more money than the government is willing to give, writes the newspaper. Meanwhile, eastern coal mining states criticised a reported offer by energy company Uniper to shut down or convert to gas all its coal-fired power stations – including a lignite plant in eastern Germany – in return for putting online its new hard-coal plant Datteln 4 in the western part of the country. The heads of German states directly affected by the coal exit argue that last year’s coal commission agreement called for Datteln not to be put into operation. Chancellor Angela Merkel has invited all coal-state government heads to a meeting in the chancellery on 15 January to find a solution, writes the Rheinische Post.
RWE's share price rose sharply following the reports, news agency Reuters said. The share price reached its highest level since late 2014 and climbed five percent compared to the day before, indicating that markets did not expect a compensation payment of this size. According to Reuters, the compensation payments will be made for power plants with a total capacity of 2.5 gigawatts turned off by the end of 2022 and the additional payments could amount to 700 million euros to finance the early retirement of about 3,000 coal workers. RWE declined to comment, wrote Reuters.
After months of talks, the multi-stakeholder coal exit commission had agreed almost one year ago to phase out the fossil fuel by 2038 at the latest. Early on, RWE had signalled it could shoulder the early shutdowns in western Germany, due to its greater economic alternatives than in the East, an approach eastern states have insisted on following. For power stations already built but which have not yet started operation, the coal commission had recommended a negotiated solution so they are not taken into operation. Datteln 4 is the only plant in Germany that matches this description.