"Today, RWE Power will start to demolish the former settlement of Luetzerath," the company said in a statement.
The protest follows a regional court decision on Monday that upheld an earlier ruling to vacate the village whose land and houses now belong to RWE.
"RWE is appealing to the squatters to observe the rule of law and to end the illegal occupation of buildings, plants and sites belonging to RWE peacefully," RWE said.
Those include firing up mothballed coal power plants and extending the lifespan of nuclear power stations after Russia cut gas deliveries to Europe in an energy standoff that sent prices soaring.
The government has, however, brought forward the date when all brown coal power plants will be shut down in North Rhine-Westphalia, to 2030 from 2038, acceding to a campaign promise from the Greens.