London — A German court has ruled in favor of Uniper in a case regarding RWE's cancellation of a 450 MW power supply contract from the as yet unfinished Datteln 4 coal-fired plant.
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The higher regional court (OLG) in Hamm confirmed a court decision that had ruled the cancellation as unlawful, it said.
RWE agreed in 2006 to buy 450 MW of power from Uniper's 1.1 GW Datteln 4 plant. However, in 2016 RWE decided to cancel the contract amid delays to the project and falling power prices.
A spokesman for Uniper said the court ruling confirmed "our legal opinion that existing contracts must be fulfilled by our customers".
Germany's last new coal-fired power plant is scheduled to start operations next summer. However, its fate still hangs in the balance amid uncertainty whether the government would follow a recommendation by the coal commission to abandon the Eur1.5 billion ($1.7 billion) project. Uniper requests "significant compensation" from the government in such a case.
"It remains to be seen whether the government wants to tackle this issue and follow the recommendation of the coal commission not to bring Datteln 4 online," Uniper COO Eckhardt Ruemmler said Tuesday.
"The court ruling may benefit Uniper's negotiation position for compensation," analysts at Royal Bank of Canada said in a note Friday.
Construction of the plant in Germany's industrial heartland of North-Rhine-Westphalia started in 2007, but was halted by a court decision in 2009.
Works resumed 2016, but steel quality issues for the boiler caused the latest delay.
The supercritical plant would top of the coal plant efficiency table, making it less likely to be displaced by gas in the merit order.
--Andreas Franke, firstname.lastname@example.org
--Edited by Dan Lalor, email@example.com