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German state aid to finance power plant closure

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World Coal,

The Commission also cleared German plans to grant €1.6 billion in public funds to finance the closure of eight lignite-fired power plants. The Commission concluded that “the measure promotes EU environmental objectives, as it helped Germany to achieve its CO2 emissions target.”

Under the plans, the lignite-fired power plants will be mothballed and then permanently closed with the first plant scheduled to stop operations in October this year. The last will close in October 2019.

The eight plants represent 13% of the total capacity of German lignite-fired power plants. Lignite provided 24% of Germany’s electricity in 2015. The government funds will be used to compensate the operators of the eight plants for foregone profits.

Following the closure of the plants, the German government aims to cut CO2 emissions by 11 – 12.5 million tpy from 2020. The eight plants scheduled for closure include MIBRAG’s Buschhaus plant, RWE’s Frimmersdrof P and Q, Niederaussem E and F, and Neurath C, and Vattenfall’s Jänschwalde F and E.

The German lignite sector come under increasing pressure with protestors recently occupying and shutting down operations at Vattenfall’s Welzow-Süd lignite mine.

Vattenfall, which is owned by the Swedish state, is in the process of selling its German lignite mining and power operations to Czech company, Energetický a prumyslový, which already owns MIBRAG. The deal has been criticised in Sweden, however, where environmental campaigners have called on the Swedish prime minister to veto the deal and close the mines instead.

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