European Commission approves German state aid for RWE over power plant closures

The European Commission (EC) today approved state aid worth 2.6 billion euros (roughly CZK 63 billion), which Germany decided to provide to energy company RWE as compensation for the early closure of lignite-fired power plants. The Commission announced this in a press release today. However, it is still investigating Berlin’s plan to provide 1.75 billion euros (nearly CZK 43 billion) in compensation to LEAG, which is controlled by Energy and Industrial Holding (EPH), owned by businessman Daniel Křetínský.

The early closure of lignite-fired power plants owned by RWE and LEAG is part of Germany’s plan to end all coal-fired electricity generation by 2038. The European Commission said the compensation for RWE constitutes state aid, but is necessary and proportionate.

„The Commission concluded that the benefits of this measure for the EU’s environmental and climate objectives outweigh any potential distortion of competition caused by the support,“ the press release said.

The Commission launched its investigation into compensation for RWE and LEAG in March 2021. „Today’s decision does not concern the formal investigation into the compensation for LEAG. The Commission remains in contact with the German authorities regarding this case,“ the press release also said.

Germany’s Ministry for Economic Affairs confirmed today, according to Reuters, that the investigation into compensation for LEAG is still ongoing. „The German government is in talks with LEAG, the affected federal states and the European Commission to conclude this process as quickly as possible,“ the ministry added.