Sweden sells its German coal mines

The Swedish government has endorsed a plan by a state-owned enterprise to sell its four German coal mines and assets to Czech investors.

Under the plan announced on Saturday, Vattenfall AB's lignite operations located in the Lausitz region of eastern Germany will be sold to Czech energy company EPH and its financial partner PPF. The mines had to be written down and selling them was better than operating them at a loss, according to Enterprise and Innovation Minister Mikael Damberg:

"The deal is of strategic importance for the company and that it is financially best option,” said Damberg. “The value of selling is higher than to keep and continue operating the business.”

According to Associated Press, Vattenfall operates around 17 large coal-fired plants located in Germany, Denmark and the Netherlands, with an aggregate capacity of about 12 GW. The buyer, EPH, is a leading Central European energy group, including over 50 companies in the Czech Republic, Slovakia, Germany, Italy, the UK, Poland and Hungary. It operates the biggest pipeline in the EU, is the biggest gas distributor in Slovakia and is the second largest Czech electricity producer.

The value of selling is higher than to keep and continue operating the business

Vattenfall's coal plants seem at cross-purposes with Germany's plan to shift to 60 percent renewable energy by 2050, the so-called "Energiewende". However Germany has been forced to expand its coal operations in recent years due to its aggressive moves away from nuclear power. After the 2011 Fukushima disaster in Japan, the country gave itself a little over 10 years to close down all its nuclear plants, but with clean energy providing just a quarter of its power demand, the country's policymakers had to rely on coal to fulfill the energy demand formerly filled by nuclear.

Expansions of lignite plants across Germany, Poland and the Czech republic have sparked angry protests from local residents due to the potential for increased pollution and the razing of medieval villages. However others support the lignite, or brown coal industry, for the jobs it creates, an estimated 25,000 positions in Lausitz alone.

Saturday's decision by the Swedish government to allow the plants to continue operating caused consternation among Germany's powerful environmental lobby. AP quotes Jan Kowalzig, a climate change adviser at Oxfam Germany, as saying the government “is spurning the landmark treaty on climate change adopted last year in Paris,” and that the sale is “a failed attempt to clean up Vattenfall’s dirty environmental record.”

“It fosters the continued digging up and burning of dirty coal in the region,” he said in a statement.