The Dutch state does not have to pay billions to shut down coal-fired power plants

The Dutch state does not have to compensate energy companies RWE and Uniper for future shutdowns of coal-fired power plants. This was determined by the court in The Hague.

The two power companies have sued the Dutch state because they believe it is unfair for coal-fired power plants to shut down earlier than expected during construction. In 2019, a law was passed stating that in order to meet climate goals in 2030, power plants may not burn coal.

The court says the 2019 law is an infringement of copyright, but that the infringement is “not unlawful.” Power companies were adequately informed and were given a transition period that allowed them to limit the damage to their revenues from power plants.

The companies filed a claim for damages because the power plants built could have been producing power for a longer period. It was fairly new. RWE opened a power plant in Eemshaven in Groningen in 2015 and Uniper in 2016 on Maasvlakte. RWE demanded 1.4 billion euros from the state, and Uniper says the damage amounted to 1 billion.

RWE said it was disappointed with the ruling and is considering an appeal. “We find interference with property without compensation unacceptable,” says a spokesperson. Uniper also describes it as disappointing. “For a sound business and investment climate, a long-term, stable and predictable regulatory framework is essential.”

Bart Jaap-Verbeek, a researcher at the Multinational Corporation Research Foundation, calls the ruling a positive sign. In its own words, the Foundation strives for a just world by revealing the power of multinational corporations.

“So these types of companies can’t shirk their responsibility and have to pay the costs themselves. Because these are also the companies that have made a lot of profits in recent years and could have invested that money in developments.”

“RWE and Uniper have hardly done anything to reduce carbon dioxide emissions, and many projects have not taken off because it would be too expensive for companies. This is also an argument from the state; if you don’t, then we must force you.”

In June, the Cabinet temporarily released the imposed production cap of 35 percent for coal-fired power plants due to reduced Russian gas supplies. “I can already see that Uniper is now wondering if 2030 is possible, because now it matters again. But in the long term, all signs are red for coal. There is simply no future for this,” says Verbeek.

Uniper is also facing nationalization by the German government. Earlier this year, the company ran into major problems because Russia turned off the gas tap. Uniper says the nationalization will not become official until December 19th.