Leag Seeks Swift EU Decision on Billion-Euro Aid for Power Plant Shutdown
In the wake of approving billions in compensation for RWE's coal phase-out, Brandenburg presses the EU Commission for a speedy decision regarding state aid for power plant operator Leag. Economics Minister Jörg Steinbach (SPD) voiced his approval of the RWE decision, stressing the urgency for Leag's proceedings to wrap up quickly. "We require clarification," Steinbach stated, acknowledging Leag's need for certainty.
The US$2.6 billion euro state aid for RWE's early coal plant closure complies with EU regulations, as announced by the EU Commission. Although less complicated than RWE's case, Leag's process is more complex due to its later lignite plant decommissioning (scheduled for no earlier than 2038). The details of the Berlin-proposed state aid for Leag, estimated at approximately US$1.75 billion euro, remain undefined, focusing on compensating for lost profits and additional post-mining costs.
Thorsten Kramer, Leag CEO, emphasized the need for a decisive move in the state aid proceedings, arguing that his company requires planning certainty for its restructuring. Market critics and competitors may view such aid as potentially distorting the fair competition base, especially considering Brandenburg's political pressure to preserve local employment.
Relevant insights from the enrichment section:
- State aid proceedings: The EU Commission evaluates state aid applications based on compliance with EU rules, considering factors such as necessity, proportionality, selectivity, and the impact on competition and the economy.
- Decommissioning timelines: A prolonged decommissioning timeline might influence the EU Commission's evaluation of state aid, taking into account the timespan for which aid is necessary.
Key takeaways
- Brandenburg Economics Minister Jörg Steinbach calls for a swift EU decision for Leag state aid.
- The EU Commission will examine the Leag case separately in Brussels due to its later decommissioning timeline.
- Compensation is estimated at US$1.75 billion euros, addressing lost profits and additional post-mining costs for Leag.
- Leag's CEO, Thorsten Kramer, insists on swifter decision-making for planning certainty.
- A possible impact of such aid on fair competition is a subject of debate and scrutiny.
