Czech power company ČEZ has announced it wants to create a stand-alone company for one of its largest coal-fired power plants now earmarked for sale.
The around 70-percent state-controlled power company said that the move, which should be completed this year, will give it more flexibility in discussions surrounding the future of the 1,000 MW Počerady plant which lies on the country’s main brown coal fields in northwestern Bohemia.
ČEZ has admitted that Počerady could be offloaded to brown coal miner Czech Coal, with which it is trying to seal a new long-term supply deal. A current supply contract with Czech Coal covering Počerady runs out at the end of 2012 with no signs so far of whether a new one can be agreed. If no deal is done by the end of the year, ČEZ will be without coal for the plant and Czech Coal will no longer be supplying one of its biggest customers.
Czech Coal has long had ambitions to step into the national power market with its own major power plants. The ageing Počerady plant —as well as a high cost 800 MW plant in eastern Bohemia, far away from the coal fields, Chvaletice — is being offered by ČEZ as part of a broader coal supplies deal.
The EPH factor
ČEZ’s recent partner in a string of acquisitions, Energetický a Průmyslový Holding (EPH), has stepped into the battle and said it is also willing to buying the two coal-fired plants, partly, it appears, to keep them out of Czech Coal’s hands.
Prague-based brokerage Wood & Company said Monday that the creation of a special company for the Počerady plant confirms what everyone knows: that it is an option in solving the stand-off over long-term coal supplies.
The brokerage said it still believed that a new coal deal allowing ČEZ to operate Počerady until the end of its lifespan (in around 2020) was its “base case.” Another possibility was for the plant to only be operated for peak demand so that coal needs would be reduced. “Selling Počerady, alone or with Chvaletice, could, however, be the preferred option for ČEZ’s shareholders,” Wood & Company analyst Bram Buring added.
Approval for transferring Počerady into the already created company must be given by ČEZ’s general meeting, usually held in late May or early June.
