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E.ON wants gas power plant in Slovakia, mulls nuclear

E.ON AG, Germany's largest utility, will build a €200 million ($266 million) natural-gas power plant in Slovakia and is mulling a nuclear plant to supply electricity as economic growth accelerates.

E.ON AG is interested in building a nuclear plant at the existing Jaslovske Bohunice plant, Johannes Teyssen, the chairman of the E.ON Energie unit, said in Bratislava. Teyssen and other E.ON executives met yesterday with Slovak Prime Minister Robert Fico. E.ON and German rival RWE AG are seeking opportunities for nuclear investment outside Germany because the German government plans to end nuclear generation by about 2021. E.ON has already said it would study a project to build a nuclear power plant in the UK and is trying to buy Endesa SA, which operates nuclear plants in Spain.

The investments are „in line with E.ON's strategy to grow across all Europe,” said Christopher Kuplent, an analyst at Credit Suisse Group in London. „An expected shortage of power” in Slovakia makes the country „an attractive environment to invest in.” The gas-driven plant will have a generation capacity of 400 megawatts and will be in operation by the end of 2009 at Malzenice, near the western Slovak city of Trnava, Teyssen said. The construction of the gas plant will start as early as this year. No timetable or other details of the nuclear-plant project were released.

Fico's government is seeking energy alternatives as is closes two 440-megawatt Soviet-style reactors at Jaslovske Bohunice as part of agreements with the European Union. Italy's Enel SpA, which owns Slovakia's biggest power company, said last month it will build two atomic reactors at the Slovak plant Mochovce. „We want to utilize the infrastructure of Jaslovske Bohunice to the maximum after the closures there,” Fico told a press conference. „We are looking at all possibilities of how to build a new significant power source at this location.” He said E.ON is „the first serious partner” interested in discussing new reactors at Jaslovske Bohunice. Slovak economic growth of 9.6% in the Q4 of last year was the third-fastest in the 27-member European Union, after Latvia and Estonia. Faster economic growth has driven demand for power.

At the same time, the expected retirement of coal-fired plants in the region and the closure of reactors in Slovakia and Bulgaria are driving electricity prices up. Slovak power prices jumped about 18% from last year, in line with gains in markets such as neighboring Czech Republic. E.ON already owns a minority stake in Zapadoslovenska Energetika AS, the biggest of the country's three regional electricity distributors. Slovakia has offers from as many as seven potential investors to build more nuclear power plants for its expanding economy, Economy Minister Lubomir Jahnatek said on March 14. The country wants to diversify production of power to avoid all the country's nuclear assets being operated by one company - Enel's unit Slovenske Elektrarne AS. (Bloomberg)