PRAGUE, Dec 21 (Reuters) - Four energy groups including three from Czech Republic placed preliminary offers for German lignite-burning power plants, mines and hydro power stations put on sale by Swedish state utility Vattenfall VATN.UL on Friday, investors and sources close to the deal said.
Vattenfall said it hoped to sell the plants in the first half of the next year following large writedowns and a radical shift in Sweden's energy policy, with renewables pushing many conventional power plants out of the market.
Vattenfall generates about 60 terawatt-hours (TWh) from lignite annually, or about 10 percent of Germany's total power production, but it is also the main source of the company's carbon emissions.
The main Czech power producer CEZ CEZP.PR , a consortium of privately-held energy group EPH and financial group PPF, and lignite miner Vrsanska Uhelna from the privately-held Czech Coal group all said they had submitted non-binding offers.
Sources close to the process told Reuters that a consortium of German utility Steag and Australian investment group Macquarie had also put in a bid.
The deal was previously expected to fetch as much as 3.5 billion euros, but the sources said 3 billion was "way too high" and the enterprise value for Vattenfall's lignite assets may be around 2.5 billion euros. One source put it even lower than that.
The prospects for lignite power in Germany will depend on the regulatory environment.
Germany's announcement in July that it would abandon plans for a levy on coal-fired power plants has breathed new life into the deal.
The sale includes roughly 8,100 megawatt (MW) of lignite-fired plants as well as corresponding mining activities in eastern Germany.
To sweeten the deal, Vattenfall also included about 3,000 MW worth of hydro-power plants in eastern Germany.
The utility has hired Citigroup (N:C) and ING as financial advisers in the transaction, with Citi being lead adviser.