EU clears €1.6bn German aid to close lignite power plants

The German Government’s plans to grant €1.6 billion (£1.2bn) of public financing to close eight lignite-fired power plants have been approved by the European Commission. Whilst the costs for closing […]

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By Priyanka Shrestha

The German Government’s plans to grant €1.6 billion (£1.2bn) of public financing to close eight lignite-fired power plants have been approved by the European Commission.

Whilst the costs for closing the plants will be paid for by the operators themselves, the government will compensate them for their foregone profits.

Around 24% of electricity produced in the country is from lignite – often called brown coal – and is believed to be one of the most polluting and carbon intensive means of power generation.

Under the plans notified by Germany in November last year, eight lignite power plants would be mothballed and closed.

The move is expected to reduce CO2 emissions by 11 million tons to 12.5 million tons per year by 2020 when all the facilities are expected to close.

That’s more than half of the additional contribution the German energy sector still needs to make to meet the national emissions target for 2020, according to the Commission.

In December 2014, the German Government announced it will reduce the nation’s CO2 emissions by 40% by 2020.