CEZ to Close its Bulgarian Thermal Plant

Czech power utility CEZ will wind down operations of its coal-burning plant in Bulgaria on Jan. 1, after it failed to get an exemption from European Union environmental rules, the company said on Saturday.

CEZ had hoped Brussels may allow the plant to continue operations during the winter as part of measures to secure energy stability given the risk of disruptions due to EU tensions with Russia, which provides almost all of Bulgaria's gas supplies.

"Despite the general agreement on temporary inclusion of the power plant into the system during the winter of 2015 in case of a gas crisis, the European Commission did not reply in connection to the plant's operational permits," CEZ's Bulgarian unit said in a statement.

"Varna thermal power plant will be temporarily excluded from the national power system at midnight on Jan. 1. After that date the plant will not be able to operate," it said.

The 1,260-megawatt plant in the Black Sea city of Varna has served largely as a back-up for Bulgaria's power grid.

CEZ said last month that talks with state-owned Bulgarian Energy Holding over setting up a joint company to fund the necessary environmental upgrades at the plant had failed.

Brussels said in October that in the event of a gas crisis it would allow the Varna plant to operate during the winter.

However, as the plant had not received a formal letter from Brussels to that end by Dec. 10, it would not have enough time to arrange coal supplies for the plant to operate over the winter, the plant's executive director, Mincho Minchev, said in the statement.

CEZ will gradually lay off the plant's staff of about 300 after Jan. 1 but will still seek ways to sell or rent the plant, Minchev said. (Reporting By Tsvetelia Tsolova; Editing by Susan Fenton)