THE LEX COLUMN: Germany’s ditching of coal no free pass
Closing mines is expensive and power producer RWE will have to redeploy or lay off 6,000 workers
It took Germany longer than most. But after a marathon negotiating session, it joined the UK, Austria and other European nations in detailing its exit from coal. RWE, an electricity producer capitalised at €18.5bn, will receive €2.6bn to shutter mines. Shares jumped on the news.
This is a good outcome for RWE, and for smaller peer Leag, which will be compensated €1.6bn for the early closure of its mines in eastern Germany. Berlin is not known for munificence towards power producers. Usually shareholders have to foot the bill for policy decisions. When Germany abruptly ditched nuclear power after the Fukushima disaster in Japan in 2011, it put no compensation on the table. A subsequent court case paved the way for RWE and its ilk to try to recoup a few hundred million euros.