The European Commission has approved a €2.6 billion (£2.2bn) German support measure in favour of RWE’s early closure of lignite-fired power plants in Germany.
The use of coal for the production of electricity will have to be phased out by 2038 under German law.
In 2021, Germany notified the Commission of its plan to compensate RWE and Lausitz Energie Kraftwerke (LEAG) with €4.35 billion: €2.6 billion earmarked for the RWE lignite installations located in the Rheinland and €1.75 billion for the LEAG installations in the Lausitz.
The Commission found the aid is necessary for RWE to phase out its lignite-fired power plants, which are currently profitable and that the company needed to be incentivised and compensated to exit the market.
Margrethe Vestager, Executive Vice-President in charge of competition policy said: “Our in-depth investigation has confirmed that this €2.6 billion compensation to RWE is in line with our EU State aid rules.
“The measure will support the phase-out of lignite-fired power plants, thereby contributing to the decarbonisation of the economy in line with the European Green Deal objectives.”
