German MVV plans coal plant to power, heat region

FRANKFURT, May 16 (Reuters) - German utility MVV (MVVGn.DE: Quote, Profile, Research, Stock Buzz) is confident of building and operating a 1.2 billion euro ($1.86 billion) coal-fired generation plant by 2013, company executives said on Friday.

The project, which Germany's only listed municipal utility plans to carry out with EnBW (EBKG.DE: Quote, Profile, Research, Stock Buzz) and RWEG.DE (RWEG.DE: Quote, Profile, Research, Stock Buzz), runs on a combined process to capture and distribute power and heat, giving it the right environmental credentials to win support at a time of increasing public opposition to coal.

The 910 megawatt plant is to replace two ageing blocks at power station operator GKM, which is owned by the three parties and supplies power to a million inhabitants of the Rhine-Neckar region and heat to 100,000 households.

"There is broad political support for this project with the exception of the Green Party, but we expect approval next year so as to secure the region's long-term energy supply," Chief Executive Rudolf Schulten told reporters in Mannheim.

"We have calculated the economic feasibility and believe that rising carbon emissions rights prices could make conventional power prohibitively expensive. But our project is on a sound economic basis."

Technical director Werner Dub said 59 percent of Mannheim households were connected to heat distribution systems after 400 million euros ($619.1 million) had been invested in local pipes. A 70 percent rate could be reached within a decade.

"The end of the oil age in Mannheim is manageable," he said.

The block would exploit 46 percent of the primary energy burnt for electricity, but recycling the heat would raise the so-called efficiency rate to nearly 70 percent, he said.

Germany is working on a national plan to double the share of such cogeneration -- providing heat from fuel burning to make power -- to 25 percent of power supply within 12 years.