Czech Coal, E.ON eye 1,200 MW joint power plant

...power plant in the Czech Republic, the Czech company said on Monday.

E.ON, the second-largest Czech power supplier after state-owned CEZ with nearly one quarter of the market, announced its intention to join forces with Czech Coal last week but it did not elaborate on the planned capacity.

Czech Coal, which controls Mostecka Uhelna, the country's second-largest lignite mining firm by output, said the plant would operate two blocs with a capacity of 600 MW each.

Czech media quoted E.ON chief Wulf Bernotat last week as saying the plant would cost 2 billion euros ($2.77 billion).

Czech Coal is seeking to hook up with E.ON after giving up on an intended alliance with CEZ to build a plant near Mostecka Uhelna's deposits in the northwest part of the country.

The CEZ's plan has been to sign a long-term deal with Czech Coal on coal deliveries for its own 1,300 MW power station, which analysts say would represent about 9 percent of CEZ's existing capacity.

CEZ took Czech Coal to court last month, saying Czech Coal refused to follow up on a preliminary agreement and sign a final deal on coal supplies until 2055.

Czech Coal says CEZ's lawsuit was unfounded and the two firms simply failed to agree on a long-term deal.

E.ON currently buys from CEZ 80 percent of the power it needs for the distribution companies E.ON operates in the Czech Republic.