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Uniper seeks legal support for Dutch coal closure compensation claim

Highlights

Legitimacy of non-compensated closure challenged

Conversion of 1 GW MMP3 'unrealistic'

Closure Act 'took account of relevant laws': minister

London — German utility Uniper is seeking a legal judgment against the Dutch state for failing to offer compensation for the early closure of Uniper's 1.07-GW MPP3 coal plant at Maasvlakte, the Fortum subsidiary said in a statement April 16.

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The move follows a similar challenge by RWE in February over early closure of its 1.56 GW Eemshaven coal plant. RWE is seeking Eur1.4 billion ($1.7 billion) in damages.

"The Dutch Coal Prohibition Act puts an end to the use of coal for the production of electricity for Uniper's MPP3 by Jan. 1, 2030," Uniper said. "This means a forced closure after only roughly 15 years of operation without any compensation."

Conversion of MPP3 to a less carbon-intensive fuel such as natural gas was "unrealistic", while the phase-out law prevented Uniper from executing its ownership rights without compensation, the Fortum subsidiary said.

"In the interest of its customers and employees Uniper is now seeking a judgment from independent courts about the question whether the law is legitimate in view of this lacking compensation," it said.

Meanwhile, the utility said it was keen to continue discussions with government on the large-scale production of renewable hydrogen at Maasvlakte.

"Uniper is committed to turning our European Generation business carbon neutral by 2035," said David Bryson, chief operating officer of Uniper SE. "We sincerely hope that we can develop an acceptable solution in order to accelerate our transition ambitions."

In a letter to parliament April 16, Economy Affairs Minister Bas van 't Wout said Uniper had also indicated it would to submit a request for arbitration to the International Center for Settlement of Investment Disputes (ICSID) in Washington.

"As soon as the request has been registered, I will have access to the documents that provide insight into the claim," he said.

Relevant provisions from international and European law were taken into account in the drafting of the Coal Prohibition Act, the minister said.

"Owners of coal-fired power stations could not assume that no government measures would be taken in the long term with the aim of drastically reducing CO2 emissions in the Netherlands," he said.

In addition, the Act offered a "broad transition period of 10 years" and only prohibited the use of coal as fuel in power stations, and did not affect any other use of the production facilities, van 't Wout said.

Article 4 of the Act allowed compensation if an operator was disproportionately affected compared to other operators, he said. To date Uniper had not invoked the article, the minister said.

And while Uniper's alternative business case after 2030 involving hydrogen was welcome, this was separate to the question of whether the Coal Prohibition Act was legal, he said.

Van 't Wout noted that, in addition to RWE's request for arbitration over closure of Eemshaven, the German utility had served two subpoenas on Feb. 26 claiming compensation for its Amer-9 and Eemshaven power stations.