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Analysis finds lawsuit over Dutch phaseout involves unviable coal assets

May 04, 2021

Modern Power Systems:

German utilities RWE and Uniper (owned by Fortum in Finland) are suing the Netherlands under the Energy Charter Treaty (ECT) for phasing out coal-fired power generation by 2030.

However, coal assets held by RWE and Uniper in the Netherlands are already economically unviable and have largely been written-down, according to a new analysis by IEEFA and Ember (an independent energy and climate think tank), in collaboration with Dutch knowledge centre SOMO. Market forces, not Dutch legislation, are causing the demise of these coal-fired power plants.

RWE is seeking €1.4 billion in compensation for incurred damages, saying it can no longer run its Eemshaven power plant profitably after 2030. Uniper is seeking compensation between €850 million and €1 billion for its Maasvlakte 3 plant.

Power producer Riverstone is also negotiating with the Dutch government over compensation for the closure of its plant.

However this new analysis states that market forces have rendered these coal plants economically unviable. The owners were making huge impairments on them from as early as 2013. This is due in large part to the uncompetitive economics of coal-fired generation, driven by a rising carbon price and cheaper generation from renewables and gas plants. 

[Staff Report]

More: Report casts doubt on RWE and Uniper compensation demands

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