November 5, 2014 / 2:21 PM / 6 years ago

UPDATE 2-Czech firm EPH buys Eggborough power plant in Britain

* EPH to run units for as long as possible, considers new units

* Biomass conversion compelling option if support there

* Czech energy group looks to expand, first buy in UK (Adds EPH chairman comments, more on biomass)

By Jason Hovet

PRAGUE, Nov 5 (Reuters) - Czech energy company EPH has agreed to buy the Eggborough coal-fired power plant from Eggborough Power Limited, making its first acquisition in Britain as part of an expansion drive, the Czech firm said on Wednesday.

EPH operates electricity, gas and mining companies mainly in the Czech Republic, Slovakia and Germany and has been looking to expand, showing interest in Vattenfall’s German assets and Enel’s Slovak utility.

The company said it would run existing units at Eggborough for as long as it is economically viable and then could build new units in the mid-term future.

The deal for the 2,000 MW plant is still subject to European Commission approval. Financial details were not disclosed.

“Our strategy is to exert our best efforts to maintain existing units operational as long as it is economically viable,” EPH Chairman Daniel Kretinsky said in an emailed statement to Reuters.

When asked whether it could go ahead with a biomass conversion project that the previous owners had wanted but could not get government funding for, Kretinsky said such a project was not possible without support.

“Should the government support be in place, the conversion to biomass is clearly a compelling option,” he said.

The British plant, which provides 4 percent of Britain’s electricity, was due to start work on a project last year to convert to generating power from biomass, a renewable energy source derived from organic matter such as wood and crop waste.

However, it did not receive government funding for the project and said it would no longer be able to supply electricity after 2015.

“The acquisition of Eggborough power plant reflects our genuine interest in the UK market,” Kretinsky said in an earlier statement announcing the sale.

EPH is the second-largest power producer in the Czech Republic after central Europe’s biggest listed utility CEZ . It is the gas leader in Slovakia and the main shipper of natural gas from Russia to the European Union.

Until this year, it had been partially owned by the richest Czech Petr Kellner, who sold his stake in the summer. Kretinsky and investor Patrik Tkac now each hold 37 percent stakes in the firm and Tkac’s financial group J&T have the remaining stake.

Additional reporting by Nina Chestney; editing by Susan Thomas and Louise Heavens

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