Czech group bucks green trend with bet on coal
AFP Monday, March 20, 2017, 12:02 am TWN
PRAGUE -- Bucking a trend set by its European peers to divest from coal, the Czech energy group EPH is buying coal-fired power plants across the continent to the dismay of environmentalists lobbying for a phase-out of fossil fuels.
Its annual production of more than 100 million megawatt-hours in its plants in Britain, the Czech Republic, Germany, Hungary, Italy and Slovakia — enough to power around 30 million homes — makes EPH the seventh largest power producer in Europe.
Set up in 2009, EPH (Energeticky a Prumyslovy Holding) relies on coal for more than half of its production capacity.
It's owner, Czech billionaire Daniel Kretinsky, is undeterred by global efforts under the 2015 Paris Agreement to curb global warming by switching from carbon-intensive fossil fuels like coal and oil to clean energy, especially solar and wind.
"From the practical and moral point of view, we believe it's wrong to reject using resources that are necessary to meet the fundamental needs of European citizens," spokesman Daniel Castvaj said of the firm's lack of qualms about coal.
The EPH controls about fifty companies with 25,000 employees. Dirty-burning brown coal, also known as lignite, accounts for 30.5 percent of EPH's capacity, while cleaner burning black coal makes up 21.7 percent.
Kretinsky, the sixth wealthiest Czech according to the Forbes magazine, controls 94 percent of EPH. It earned 1.64 billion euros (US$1.73 billion) in gross profit in 2015 after taking in 4.57 billion euros in consolidated revenue.
Kretinsky also owns the Czech branch of German-Swiss publishing group Ringier Axel Springer Media AG and the top-flight soccer club Sparta Prague.
EPH has been on a shopping spree, snapping up coal-fired electricity plants from European energy giants like E.ON, Enel or RWE, which they are happy to sell.
Given the global push to decarbonise "there's a great deal of uncertainty about the future of coal, gas and nuclear power," according to Marek Hatlapatka, an analyst with the Prague-based brokerage and investment firm Cyrrus.
"The energy sector is currently divided into two completely different streams with capital intensive 'old energy' on the one hand and 'new energy' on the other, that is more modern, less capital intensive and with a lot of room for renewables," he told AFP.
"This division is putting huge pressure on companies and regulators," Hatlapatka said, adding that it is forcing giants like E.ON or RWE to sell off their fossil fuel-based assets at "relatively low prices reflecting the risk."
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