CEZ to build biggest onshore wind park in Europe

By Jana Mlcochova

PRAGUE (Reuters) - Czech power group CEZ plans to build a 1.1 billion euro ($1.62 billion) wind park in Romania, the largest of its kind in Europe, in a move to offset emissions from dirtier coal-fired power plants.

CEZ said the two-stage, 600 megawatt project would be built 17 km (10 miles) from the Black Sea shore, north of the port of Constanta, and would be around twice the size of the next biggest onshore wind farm in Europe.

Just over half the wind park would come on line in 2009 and the rest a year later, CEZ said.

The project will be one of the largest new foreign investments in European Union newcomer Romania, and signals a vote of confidence in its cash-hungry economy which grapples with poor infrastructure and incompetent administration.

The Romanian leu currency rose 0.2 percent to 3.54 per euro after the CEZ announcement.

"It is good that foreign direct investment grows," said Ciprian Dascalu, economist at Millennium Bank. "The gap between us and the EU is big so there is plenty of room for investment. In the long term, it will benefit the economy and the currency."

Romania, which needs foreign cash to finance modernization and to plug a vast current account deficit, attracted foreign direct investment (FDI) worth 4.8 billion euros in the first half of 2008. Last week, the finance minister said the figure could top 10 billion this year.

CEZ said it bought the investment plans, which include pre-approved permissions and contracts, from renewable power developer Continental Wind Partners. They will include two adjacent farms in the towns of Fontanele and Cogealac.

CEZ, central Europe's largest listed company, aims to boost spending on renewable energy due to an EU climate package proposal expected to push up costs for production from fossil fuels starting in 2013.

"Investment into renewables is one of the strategic measures we are taking to respond to the adopted energy-climactic package of the EU," CEZ Chairman Martin Roman said in a statement.

Roman added that CEZ would also extend power production from gas and nuclear plants as a way to meet CO2 emission targets.

CEZ shares were 1.06 percent lower at 1,226.80 crowns at 3:45 a.m. EDT, underperforming Prague's main PX index, which was up 0.12 percent.

PUSH TO WIND

Eastern Europe, which relies mainly on coal and nuclear energy for its electricity production, is lagging behind its western neighbors on meeting the EU's renewable energy goals.

The bloc wants 20 percent of energy demand to be sourced from renewables such as solar, wind, wave, hydro and biomass by 2020, versus 8.5 percent now.  Continued...