Energy group Energetický a Průmyslový Holding (EPH) has called the withdrawal of mining company Czech Coal from a contract to supply the former’s Elektrárny Opatovice power station with lignite “unjustified,” rejecting claims that it failed to make payments for supplies.
Czech Coal, controlled by billionaire Pavel Tykač, earlier Thursday announced it had terminated the brown coal supply agreement due to Elektrárny Opatovice’s “recurring gross breach of contractual terms and conditions, consisting in its failure to pay the purchase price for the coal accepted.”
The mining company further claimed on its books are more than Kč 500 million in overdue receivables from EPH, a venture of investment groups PPF and J&T, of which the Elektrárny Opatovice power station is a part. EPH said it was an ‘absurd’ step typical of the ‘long-term destructive approach of Czech Coal’ in the country’s energy sector.
EPH said it was an “absurd” step typical of the “long-term destructive approach of Czech Coal” in the country’s energy sector and called its claim regarding the overdue Kč 500 million “an obvious lie.”
The 360 MW Elektrárny Opatovice station is a major heat and hot water producer for the Hradec Králové, Pardubice and Chrudim areas. Czech Coal said essential services would not be affected.
“Although the agreement has been terminated, we are offering to supply the brown coal quantities required for heat and hot water production for the current prices,” Jan Dienstl, Czech Coal’s Vice-Chairman, said in a statement.
Eyes on the prize
EPH and Czech Coal are set to join battle for two power plants that Czech state-owned power giant ČEZ has indicated it is willing to offload, in Počerady (with an installed output of 1,000 MW) and Chvaletice (800 MW).
ČEZ and Czech Coal themselves have been at loggerheads over a long-term supply agreement for around six years. “The main reason behind the considered sale of both power stations is the uncertainty of coal supplies after 2013 due to as yet inconclusive negotiations with the fuel supplier, Czech Coal,” CEZ spokesman Ladislav Kříž said last month.
Czech Coal, meanwhile, has long been seeking to enter the electricity production market, outlining plans to build its own power plants and complaining to the European Commission in Brussels that ČEZ has been trying to shut it out of the market.
EPH is also looking to expand and has been one of the most aggressive power companies on the Czech and neighboring markets over the last five years and has ambitious plans for further development.
The energy company, partly controlled by billionaire Petr Kellner, says it is prepared to invest €5 billion for power sector investments in the Czech Republic, Germany, and Slovakia, including a new coal-fired power plant near the MIBRAG coal mine in Germany, for which it has agreed to buy out the 50 percent stake held by ČEZ.