November 2025 |
251109 |
ENERGIE-CHRONIK |
On November 18, the EU Commission officially announced that it no longer has any concerns under state aid law regarding the public-law agreement on ending lignite-fired power generation in Germany, including in the case of LEAG. This means that the agreement, which was concluded in 2021 between the German government and the two energy companies RWE and EPH after approval by the Bundestag (210102), can finally come into force. On November 6, the Bundestag had approved the amendments to the agreement that were necessary to address the concerns raised by the Commission.
The public law agreement grants RWE compensation of €2.6 billion for the decommissioning of its lignite-fired power plants and opencast mines in the Rhineland. The EPH Group will receive €1.75 billion for the closure of its plants in eastern Germany, which operate under the LEAG brand and have been owned by the Group's subsidiary EP Energy Transition since February this year.
The compensation for RWE was already approved by the EU Commission at the end of 2023 (231213) after the group decided to shut down the last lignite blocks in 2030 instead of 2038 (221004). In the case of LEAG, however, it had expressed reservations and demanded that the payment of the sum be made dependent on a “phased procedure” in order to avoid “overcompensation” (240609). On this basis, an agreement was reached with the Federal Ministry of Economics and EPH in June 2024, which made approval appear certain, but did not result in a formal decision for the time being.
The Commission justified the official approval that has now been granted on the grounds that “the contribution of the measure to the EU's environmental and climate protection objectives outweighs any distortion of competition that may result from the aid.” The aid is necessary “to enable LEAG to decommission the lignite-fired power plants that are currently operating profitably.” It is also appropriate “because other policy instruments would not allow for such a targeted and predictable decommissioning or an agreement between Germany and the power plant operators.” In addition, it is proportionate “because it is limited to the minimum necessary and does not lead to overcompensation.”
In addition to the two large lignite-fired power generators, Energie Baden-Württemberg (EnBW) also signed the public law agreement, as it owned one of the two identical units at the Lippendorf power plant. As it announced in May of this year, it has since signed another agreement and sold this unit to EPH subsidiary EP Energy Transition, which already owned half of the joint power plant. As this was its only lignite unit, it will thus become “lignite-free by December 31, 2025.”