Following today’s announcement (18th April 2016) that Vattenfall intend to divest their German lignite assets to EPH, Sandbag releases this paper investigating the past acquistions of EPH, and their likely result for the climate.
Dave Jones, Sandbag’s Carbon & Power analyst comments:
“This is a lose-lose-lose situation.
It’s a lose for the climate, because EPH are unlikely to implement a just phase-out that Vattenfall could have implemented, meaning the lignite plants are likely to stay open longer than they would have otherwise.
It’s a lose for the Swedish government, because it is very likely that the sale price to EPH is so low, that it might even be negative when you take into account liabilities left in Vattenfall. Keeping the assets, and phasing-out generation would arguably be more profitable.
It’s a lose for German workers. EPH has a track record in rapidly and aggressively cutting jobs at the plants it acquires, rather than the measured phase-out Vattenfall could implement, aided by German government transition funding for green jobs in Lusatia.
It’s a big gamble to hand these assets at a cut-price, or even a negative price, to a faceless organization. EPH have no public shareholders to be responsible to, no electricity customers to be responsible to, and no ownership from regional or national government to be responsible to. With electricity prices so low and lignite so unprofitable, EPH ownership leaves Lusatia’s lignite industry in a precarious position, with the possibility it could collapse at any time, with devastating consequences to the local community.”