The German government will present its draft law next month on the country’s planned exit from hard coal and lignite-fired power generation, the economy and energy ministry said on Monday.

However, the order of the closures and compensation due to the operators of the lignite-fired units involved was still being negotiated, said the ministry.

Meanwhile, the government also planned to extend subsidies for combined heat and power plants (CHP), promoting a switch from hard coal to gas, it added in a statement.

Currently German operators get an additional subsidy of EUR 6/MWh if they invest in replacing an existing hard coal CHP with a gas-fired unit.

Proposed closures

Earlier this year, the government appointed coal commission proposed the closure of around 3 GW of lignite-fired capacity and 4 GW of hard coal-fired units by 2023, while roughly halving the current capacity by 2030. The country would fully exit coal by 2038.

Operators are seeking compensation for the closures and RWE, the country’s biggest lignite-fired power plant operator, has demanded around EUR 1.2-1.5bn per GW of capacity.

However, environmental law charity ClientEarth reiterated earlier that German utilities should not bank on big pay-offs for closing lignite operations, as this contravened domestic and EU state-aid law.