The German government’s plans to introduce a levy on the most polluting power generators is having an impact on Swedish utility Vattenfall’s attempts to sell its brown coal assets in Germany.

Reuters reports that insiders have confirmed that the sale is facing delays, pointing to concerns about the levy threatening a potential deal. “The deal is delayed, on hold,” one of the people told the news agency.
Vattenfall sign
The process was supposed to commence this month but is now expected only later in the year and may take until the end of the European summer.

Vattenfall wants to dispose of 9000 MW worth of lignite coal-fired power plants in eastern Germany, responding to mounting write-downs on past acquisitions that pushed it deep into loss.

The company’s plants are particularly vulnerable to the punitive legislation as lignite, produces the highest CO2 output of any type of electricity generation.

The insiders who spoke to Reuters say the assets may be valued at up to $3.8bn, but the figure could be dramatically lower, depending on how the political framework for lignite in Germany plays out.

The government brought in further policy aimed at cutting emissions back in December, in response to fears that the country may not meet its 40 per cent emission reduction target by 2020.

Vattenfall’s press office had no comment to make when contacted by Power Engineering International on the matter, stating they would’t comment on an ongoing process. However they did signpost the release of their Q1 statement on Tuesday, where more information on the company’s position may well be revealed.

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