German utility RWE AG (RWE.XE) said Friday it has dropped plans to build an 800 megawatt coal-fired power plant in Silesia , Poland , adding that "uncertain market conditions" and the European Union carbon dioxide emissions trading scheme make the project economically inviable.

A spokeswoman for RWE said the utility shelved the plans to build the Czeczott power plant, which it had planned to build with Polish coal mining company Kompania Weglowa, earlier this month.

RWE had previously said the total investment volume for the power plant could reach EUR1.5 billion.

The company spokeswoman said: "Studies on the economic viability of the project showed that profitability of the project does not meet the requirements assumed by the partners and does not allow for a go-ahead decision."

"This is due to uncertain market conditions and EU policy requirements, particularly relating to future costs of CO2 emissions, which drive up investment risks for hard coal-fired power generation," she added.

RWE and Kompania Weglowa last year formed a joint venture to examine the possibility to build the power plant, which would have started production of electricity in 2015.

RWE owned 75% in the joint venture and Kompania Weglowa the remaining 25%.

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