EU probes Germany's move to pay for coal plant closures

BERLIN (AP) — The European Commission said Tuesday it has opened a probe into whether Germany's plans to compensate owners for the early shutdown of coal-fired power plants by 2038 is in line with the bloc's rules on state aid to businesses.

Germany agreed last year to pay utility companies 4.35 billion euros ($5.23 billion) to speed up the closure of their coal-fired plants as part of the country’s efforts to fight climate change. Many of the plants use lignite, a particularly polluting coal mined in Germany.

“Our role is to safeguard competition by making sure that the compensation granted to the operators of the plants for phasing out earlier than foreseen is kept to the minimum necessary,” said Margrethe Vestager, the EU’s top official overseeing competition policy.

Environmental campaigners say that the companies benefitting from compensation — RWE and LEAG — would likely have to close the plants soon anyway because generating electricity from burning coal is becoming more expensive than renewable energy sources such as wind and solar.