Energy giants seek billions as compensation for coal plant closures

Companies have sued governments for the disruption caused by coal bans

Four European governments have been reportedly sued by five energy groups that seek billions of compensation for damages over fossil fuel projects.

According to the Financial Times, the group of companies includes German energy giants RWE and Uniper and the UK’s Rockhopper.

These companies allegedly launched cases against the Netherlands, Italy, Poland and Slovenia under the Energy Charter Treaty.

The report said the five energy groups seek combined compensation of an estimated €3.7 billion (£3bn).

Through these cases the companies aim to challenge government decisions to mandate the closure of coal-fired power plants, prevent the development of new fossil fuel projects or require an environmental assessment.

RWE told ELN: “RWE fully endorses the importance of the energy transition, the need for climate action and the necessity for carbon reduction.”

The company recently announced its new strategy ‘Growing Green’ – a commitment to invest €50 billion (£41.7bn) gross by 2030 in its core business.

That will include an increase in the money spent on offshore and onshore wind, solar, batteries and hydrogen.

The company added: “And in this light, RWE understands the decision taken in 2019 by the Dutch Parliament to adopt the Coal Ban Act for electricity generation.

“However, the company does not consider it right that the law does not provide for compensation for the disruption to the company’s property.

“Therefore, RWE filed a request for arbitration at the International Centre for Settlement of Investment Disputes in January 2021. In parallel, domestic legal proceedings against the State of the Netherlands were instituted in February 2021.

“RWE claims compensation for the damage it suffers as a result of the Act prohibiting the use of coal in electricity production. Because of this Act, RWE has to close its Amer and Eemshaven power plants no later than by 1st January 2030, although the Eemshaven plant has a life span until at least 2055.

“During the legislative process, the company has offered a number of times to work together to find a solution which is suitable for both the Dutch Government and RWE. Unfortunately, the government never agreed to these talks. Should the Dutch Government make appropriate proposals, the company will continue to be willing to do so.”

Rockhopper declined to comment on the arbitration as it remains an ongoing legal process.

ELN has contacted Uniper for a response – the company did not respond before publication.

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