Prague - The Czech coal wars have ended. Semi-state energy company CEZ and Czech Coal's Vrsanska Uhelna company have signed a contract on coal supplies from Czech Coal's Vrsany mine for CEZ's Pocerady plant.
The contract is worth CZK 200 billion (approximately eight billion euro), which is roughly equal to the cost of the planned expansion of the Temelin nuclear plant.
Both companies said that the negotiations were exceptionally complicated.
"The agreement may last beyond 2060," said CEZ chief Daniel Benes, adding that the contract will stabilize the Czech energy sector and provide it with jobs and development.
The agreement has ended the eight-year war between CEZ and Czech Coal over coal prices, and will influence the Czech energy market for decades.
By signing the contract, CEZ has secured a stable inflow of coal supplies for its most effective coal power plant for a predetermined price. If the agreement proves unprofitable for CEZ, the state company is allowed to back away from it and sell the Pocerady plant to Czech Coal. In addition, Czech Coal has pledged to withdraw its complaint against CEZ, filed with the European Commission three years ago.
In exchange, Czech Coal has a buyer for the coal mined at the Vrsany mine, which was threatened with being closed down. This would result in a loss of hundreds of jobs. In addition, CEZ has agreed to buy the coal supplies for a higher price.
The coal price set by the contract is expected to become a benchmark for the entire Czech energy sector.
Thanks to the contract, Czech Coal's Litvinovska Uhelna is now very close to buying the Chvaletice plant from CEZ. In January it appeared that the plant would be sold to the EPH Holding, but CEZ eventually launched a new selection process last week, and currently it is Czech Coal that seems to be the most likely buyer. "I absolutely do not understand CEZ's actions," said EPH chief Kretinsky to Aktualne.cz about the state energy company's change of heart.
CEZ agrees to sell Chvaletice plant to Kretinsky's EPH
In order to increase its chances of buying Chvaletice, Czech Coal owner Pavel Tykac has divided his Most-based coal empire into two parts. Tykac stays in charge of the Vrsanska Uhelna company, which has signed the coal contract with CEZ. Tykac's associates Jan Dienstl and Tomas Fohler are in control of the Litvinovska Uhelna company, which bids to buy the Chvaletice plant.
The reason of this division is that Tykac is politically unacceptable because of his ongoing criminal prosecution. That's why he has decided to distance himself from the company that bids to buy the plant.
