German utility RWE said it will no longer invest in the construction of new coal-fired power plants and focus on electricity generation from renewable energy sources.

Plans for replacing existing units at Niederaussem in North-Rhine Westphalia with a new lignite power station (called BOAplus project) have been cancelled.

The move comes as RWE is gearing up to bundle the renewables assets of its Innogy unit with those of rival E.ON as part of a wide-ranging share- and asset swap deal that still needs final competition authority approval and is expected to be completed later this year.

“New coal-fired power stations no longer have a place in our future-oriented strategy,” RWE chief executive Rolf Martin Schmitz said.

“Following the completion of the transaction with E.ON, RWE will be one of the world’s leading renewable energy players.”

RWE has been criticised massively in Germany for defending its right to clear the Hambach Forest near Cologne for its lignite mining activities, and its insistence to continue using coal and lignite for decades to come.

The utility in today’s announcement reiterated that coal-fired power stations will be needed to provide back-up capacity, although it acknowledged that its share in the power mix will decline gradually.

RWE says since 2012 it has already reduced its CO2 emissions by some 60m metric tons, or 34%.

The announcement came as French peer Engie said it has sold 2.35GW in coal-fired capacity in the Netherlands and Germany, which will reduce the share of coal in its energy mix to 4% once the transaction closes in the second quarter of this year. That compares to a 13%-share at the end of 2015.