Germany obtains more than a third of its electricity from coal combustion and generates large quantities of greenhouse gases that contribute to global warming. Operators of factories in West Germany receive 2.6 billion euros ($ 2.9 billion) and 1.75 billion euros go to operators of factories in the east, with payments made about 15 years after the factories were shut down.
Plans to wind down coal power by 2038 have been in the air since last year, and the three-year cut to the timetable did not impress environmentalists.
The government struck a deal worth more than 40 billion euros ($44.7 billion) in the small hours of Thursday morning with the premiers of Germany's coal-mining regions.
There are now 30 coal-fired power stations in Germany, including RWE's lignite-fired Niederaussem plant (picuted above), accounting for around a third of its electricity generation.
Coal provided about 35 percent of Germany's total power in 2018, but government officials want to follow France, where coal produces just 3 percent of its energy.
"Germany, which is one of the strongest and most successful industrial nations in the world, is taking giant steps towards leaving behind the fossil age", said Olaf Scholz, the finance minister.
Once the heartland of Germany industry, the coal regions of North-Rhine Westphalia have fallen on hard times as traditional heavy industries have lost sway, while coal regions in the east have yet to fully shrug off the impact of four decades in Communist East Germany.
Over the same period, Berlin aims to reduce output of greenhouse gases by 55 percent compared with 1990's levels - a goal agreed previous year under pressure from demonstrators like the worldwide "Fridays for Future" movement.
"Australia's forests are burning, millions of people are demonstrating for climate protection and the German government is clearing the way for a new coal power plant", lamented Martin Kaiser, the managing director of Greenpeace Germany.
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In a joint press statement with ministers Scholz and Schulze, federal minister of economics Peter Altmaier said: "A breakthrough came in yesterday's talks at the federal chancellery".
"Nothing shows more clearly than Datteln 4 that this government can't find an answer to the climate crisis".
Uniper, which now operates four coal-fired power stations, plans to bring the Datteln-4 plan online this summer after a protracted 12 year construction programme and technical difficulties.
The response from businesses to the agreement was mixed.
Seibert said that Berlin would also pay compensation to employees affected by the coal exit law up to 2043.
In the United Kingdom, coal-fired power made up just 3% of the UK's electricity in the first quarter of 2019, according to Ofgem, and will be phased out altogether by 2025.
Environmental organizations criticized the government plan for being too slow and for not expanding renewable energy sources quickly enough.
The German Green Party also said it would seek to review the status of the plant if it gets into government, although that prospect depends on upheaval in the current CDU-SPD coalition and a snap election. When you've submitted your account email, we will send an email with a reset code.