Europe energy giant to dump brown coal, focus on renewables

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As Australia’s conservative governments and fossil fuel industry hail the future of coal, one of the biggest generators of brown coal in Europe, Vattenfall, is looking to exit from its huge brown coal generation portfolio in Germany, and focus instead on renewable energy.

State-owned Swedish energy giant Vattenfall will in the future concentrate on renewable energy. President and CEO Magnus Hall has announced that the company is considering a “new ownership structure” for its lignite division.


Vattenfall’s lignite operations in Germany’s Lusatian region have created more than 15,000 direct and indirect jobs in the area.

Sweden’s new left-of-center governing coalition, headed by Social Democratic Prime Minister Stefan Löfven and including the country’s Green Party, has made its plans for the state-owned energy company Vattenfall clear: The group’s future must lie in the development of renewable energy and not in coal and gas, the Social Democrats announced earlier this month in Stockholm.

The company’s board has now confirmed that it is fundamentally changing its corporate energy policy. “We have a clear strategy to improve our CO2 footprint and refocus our portfolio on renewable energy,” said Vattenfall CEO Magnus Hall on Thursday. To that end, the board has decided to review a new and lasting ownership structure for the group’s lignite division.

“We recognize the current and future significance of lignite for the local economy and the German energy policy,” Hall said. The German states of Brandenburg and Saxony are significant stakeholders in Vattenfall’s activities in the region of Lusatia (Lausitz), which stretches across both states. The company said it would remain in close dialogue with state leaders. Hall added that Vattenfall would hold on to its other business units in Germany.

The sale of Vattenfall’s operations in Germany could happen either quickly or take years, Ulrich Freese, Vatenfall supervisory board member responsible for open-cast mining, said Thursday in an interview with Berlin radio station RBB. The continued operation of the Vattenfall plants is not in question, Freese added. Vattenfall’s lignite operations in the Lusatian region have created more than 15,000 direct and indirect jobs in the area.

Greenpeace has welcomed the Swedish government’s move to make Vattenfall more climate-friendly. “But to achieve this goal, CEO Magnus Hall cannot just sell the climate-damaging lignite business. A sale does not solve the problem, it just passes it on,” said Greenpeace energy expert Karsten Smid. Vattenfall has earned billions over the years with for years with Lusatian lignite. If Vattenfall is serious about its conversion to renewable energy, then the company has to gradually shut down the brown coal business in the coming years and at the same time invest in renewable energy in Lusatia, he added.

Source: PV Magazine. Reproduced with permission.  

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  • Sid Abma

    Let’s talk.

  • john

    Lignite is pretty poor really and the article points out how selling it does not solve the problem some other company will use this.
    A huge amount has to be burnt to produce power
    Even black coal is better.
    So solutions please?
    Perhaps more wind and solar with storage now we are talking.
    Just a question what is the geo thermal situation there?

    • Harry Verberne

      It is significant in that it is yet another divestment of fossil fuel, adding to a number of similar announcements across the globe. As well, Vattenfall will sink the proceeds of the sale into renewables so that is very positive.

      • wideEyedPupil

        How many corporations will be looking to by a lignite burning plant in a country looking to end fossil fuel use completely? there’d have to be more risk there than in buying a coal station in Jeff Kennet’s Victoria. Can’t imagine they’ll get a big price.