March 19, 2019 - Legislation on a first wave of German lignite and coal closures is expected to be passed by parliament in H1 2020, RWE CEO Rolf Martin Schmitz said Thursday.

In January, the country's coal commission recommended capping lignite and hard coal-fired generation capacity at 15 GW each in 2022.

This would require 3 GW of lignite and 4 GW of hard coal closures.

The commission favored voluntary deals to achieve the closures with plant operators compensated by the government.

"We had first talks with the [energy and economy] ministry yesterday [March 13]," Schmitz said at RWE's annual results presentation.

The process was expected to take many months, he said.

Early lignite closures are expected to focus on RWE's North Rhine-Westphalia heartland, with the commission recommending preservation of the ancient Hambach forest near Cologne, which stands in the way of RWE's planned mine expansion, currently on hold due to a court order.

RWE is fighting closures focused exclusively on its region and has called for greater compensation if mining operations will be impacted, suggesting payments of up to Eur1.5 billion ($1.7 billion) per GW closed, double the level of payments under the current lignite reserve mechanism.

German utility Uniper said Tuesday it expects first talks with the government in the coming weeks. The talks precede a June 2020 deadline to conclude agreements for a first wave of coal closures, it said.

The fate of its new 1.1 GW coal plant at Datteln hangs in the balance with Uniper requesting "significant compensation" should the government endorse the commission's recommendation to abandon the Eur1.5 billion project ahead of startup.

The government is assessing the commission's report, but says the recommendations should be implemented.

An energy ministry official said this week that a first draft of the legislation could be ready by late autumn.

Details about regional support for mining areas would be published this spring, state secretary for energy Andreas Feicht told a parliamentary hearing this week.

State elections in September 2019 in Brandenburg and Saxony, home to the mining region in eastern Germany, were seen as a key reason for the focus on RWE's mining region further west in the first wave of closures.

Germany plans to phase out coal completely by 2038. Another 13 GW closures are recommended by 2030 to meet climate targets, and the government is also targeting a 65% share of renewables in the power mix by 2030.

RWE plans to focus more on renewables with its new RWE Renewables unit expected to invest some Eur1.5 billion annually to grow its RES portfolio by 2-3 GW every year, it said.

None of its key projects planned over the next two to three years will be in Germany.

German RES investment is currently "not attractive, which is a problem," Schmitz said.