Coal phase-out: EU Commission approves billions in payments to RWE

Germany is allowed to pay the energy company RWE 2.

Coal phase-out: EU Commission approves billions in payments to RWE

Germany is allowed to pay the energy company RWE 2.6 billion euros in state aid for the coal phase-out. “The aid will compensate RWE for the early closure of its lignite-fired power plants in the Rhenish region,” the EU Commission announced on Monday in Brussels.

According to the German coal phase-out law, no more electricity will be generated from coal from 2038. The traffic light parties SPD, Greens and FDP had agreed in their coalition agreement to “ideally” bring forward the coal phase-out from 2038 to 2030.

Germany had already reported the compensation payment to the Commission in 2021, totaling 4.35 billion euros for two operators. 2.6 billion euros were earmarked for the RWE lignite plants in the Rhineland and 1.75 billion euros for the Leag plants in Lusatia.

The Commission concluded that although the compensation payment to RWE constituted state aid, it was necessary to enable RWE to phase out its lignite-fired power plants. The current net value of the lost profits is higher than the value of the compensation.

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