Energy company RWE shuts down first lignite unit as part of coal phase-out

German energy company RWE has shut down its first lignite unit as part of the country's coal phase-out, der Tagesspiegel writes. The unit is part of the Niederaussem power plant in North Rhine-Westphalia, a state in the west of Germany. It was set to be taken off the grid by 31 December in accordance with the coal exit law. The closure took place earlier “due to market conditions,” a company spokesman told Tagesspiegel.

The way the energy market works needs to be changed fundamentally as soon as possible, Rolf Martin Schmitz, head of RWE, said in an interview with die Welt. “With an ever-increasing share of renewable energy, the market as we know it no longer works because it does not provide incentives for the construction of new plants, or it does so too late,” Schmitz said. The CEO added that the expansion of renewables requires “auction models” and “a capacity market for investments in supply security.” In light of the recently tightened EU emissions reduction target for 2030, Schmitz said he believes the targets can be achieved with an energy market that “directs private investment, not tax money, into renewable energies.”

The closure of the 300-megawatt Niederaussem unit will save about 2.5 million tonnes of CO2 annually, according to RWE. A total of 300 jobs will be lost. In the coming years, RWE will gradually phase out further lignite-fired units. The company will receive 2.6 billion euros in compensation for the phase-out.