Noerr advises Federal Government on public-law contract re German coal phase-out

Under the leadership of our partners Holger Schmitz, Tibor Fedke and Christof Federwisch our firm has advised the Federal Ministry for Economic Affairs and Energy on the conclusion of a public-law contract on the coal phase-out in Germany.

The contract was concluded between the Federal Republic of Germany and the operators of large-scale coal-fired power plants, RWE, LEAG, EnBW and Saale Energie.

The basis for the contract is the German Coal-Fired Power Generation Phase-Out Act, which came into force in August 2020. The act provides for the gradual shutdown of all coal-fired power plants in Germany by 2038 at the latest.

In return for the early shutdown of their power plants, the operators will receive compensation as follows: RWE is to receive €2.6 billion for decommissioning its plants in the Rhineland, and LEAG will receive €1.75 billion for shutting down its plants in the East German Lausitz region.

The compensation will be paid in 15 equal annual instalments, starting from closure of the first power plant unit, and will be used for reclaiming the opencast mines. In return, the operators have agreed not to bring any legal action, whether before national courts or international arbitration tribunals.

The terms of the contract and the compensation payments are subject to the EU Commission’s approval under state aid law.

Holger Schmitz comments: “We are very pleased that we have been given the chance to advise the Federal Government on all issues of company law, both in connection with the Coal-Fired Power Generation Phase-Out Act and the public-law contract now signed. With this amicable solution, the Federal Government is living up to the national implications of its energy policy decision.”

Advisors to the Federal Government:

Team lead: Dr Holger Schmitz (Constitutional, Mining and State Aid Law, Berlin), Dr Tibor Fedke (Corporate, Berlin), Christof Federwisch (Energy, Frankfurt)

Advisory/Company valuation
Santiago Ruiz de Vargas (Munich)

Employment
Yvonne Dietzel (Dresden)

Energy
Dr Martin Geipel (Berlin)

Corporate/M&A
Katrin Andrä, Ira Tsoures, Marcel Behringer, Daniel Fuchs (Berlin)

Litigation, Arbitration & ADR
Dr Anke Meier (Frankfurt)
Christian Balzer, Barbara Maucher (Dusseldorf)

Regulatory & Governmental Affairs
Dr Max Helleberg, Dr Carl-Wendelin Neubert (Berlin)

Restructuring & Insolvency
Dr Dorothee Prosteder (Munich)
Simone Schönen, Philippa Peters (Hamburg)

Czech law
Barbara Kusak, Michal Janicek

Cyprus law 
Chrysostomides: Chryso Pitsilli-Dekatris, Eri Kozakou

Dutch law 
Houthoff: Kirsten Berger, Bas van der Mei

Luxembourg law
Arendt & Medernach: Michael Jonas