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Firm behind Dublin wind-energy project suing Netherlands for €1.4bn over plans to shut coal plants

The company leading plans for Dublin’s first offshore wind farm is suing the Netherlands for €1.4billion over its plans to shut coal plants.

International energy firm RWE lodged the compensation claim after the Dutch government adopted a climate-action policy that will see coal power phased out by 2030.

Its clean energy arm, RWE Renewables, is meanwhile leading the development of the Dublin Array, a wind farm of up to 61 turbines for which an application for planning permission is to be lodged later this year.

RWE says there is no contradiction between its legal action against the Dutch and its positioning of itself as a leader in green energy.

“RWE expressly supports the energy transition in the Netherlands and measures to reduce carbon emissions,” the company said. “We do not, by any means, question the coal phase-out decided by the Dutch parliament.

“However, we do not consider it right that the law does not provide for compensation for the resulting disruption to the company’s property.

“We have filed a request for arbitration against the Netherlands at the International Centre for Settlement of Investment Disputes (ICSID).”

RWE built an electric power plant to run on coal and biomass in the Netherlands in 2015, but in 2019 climate campaigners won a landmark court case which ruled the Dutch government was not taking adequate action on the climate crisis.

A phase-out of coal was subsequently announced. RWE claim they do not have sufficient time to fully convert their plant to alternative fuels by 2030 and will lose money in the switch-over.

The Germany-based company has filed its claim under the Energy Charter Treaty, which protects the investments of energy companies in foreign countries.

RWE previously used the charter to sue Spain for changing regulations around incentives for wind farms in 2010 in the wake of the financial crash.

The company claimed the changes hit its revenues and submitted a claim for €60million. The case concluded last December with an award of €28m to the company plus €3m towards costs.

RWE took another case against Spain which went on for seven years before being annulled earlier this year.

In Ireland, the company is working on a number of onshore and offshore wind-energy projects, most notably the Dublin Array, which is proposed for the Kish and Bray Banks that lie around 10km from shore, running roughly parallel with the coastline from Dún Laoghaire to Bray.

If the planning process goes smoothly, construction is expected to start in 2024 and take two years to complete.

The Government is placing high hopes on offshore wind to dramatically increase the supply of renewable energy and help cut the country’s carbon emissions in half by 2030.

RWE cites the climate emergency and Ireland’s climate-action plan in promoting the Dublin Array project.

It says it aims “to become a significant contributor in the delivery of Ireland’s renewable targets, in addition to creating local jobs and investment along the way”.

It also says it is committed to phasing out all its coal operations and being a carbon-neutral company by 2040.

Currently, about a quarter of the company’s electricity output comes from renewable sources and the rest from coal, lignite and nuclear power.

Mechanisms such as the Energy Treaty Charter and the ICSID have been coming under increased scrutiny across the EU, and particularly in Ireland, where a row over the inclusion of similar investment protections in the Comprehensive Economic and Trade Agreement (CETA) with Canada is holding up its ratification.

The Oireachtas EU Affairs Committee has begun a series of meetings on CETA to try to settle the dispute.