No money for old lignite


This document by Client Earth was published without any financial contribution from EUKI.
Germany’s Coal Commission has proposed closing hard coal and lignite power plants by 2038 latest (and by 2035 earliest). It recommends compensating operators of plants that close by 2030, using some combination of contractual agreements, tender procedures, and ‘regulatory’ solutions.
The document analyses the legal requirements for compensation for lignite plants under the German Constitution and EU State aid law – which prevents subsidies being awarded to companies unless first approved by the European Commission. The analysis draws on the economic context – in which lignite plants are now losing money. Additionally, most plants have already operated for 25 years or more.
Given German and EU State aid law requirements to limit compensation to the minimum necessary, it is hard to see a clear legal basis for awarding large sums in compensation to coal plant operators.