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Expert on the Uniper rescue: "The surcharge for consumers could increase further"

2022-07-24T04:43:34.303Z


Expert on the Uniper rescue: "The surcharge for consumers could increase further" Created: 07/24/2022, 06:32 By: Matthew Schneider The federal government has launched a billion-euro rescue package for the troubled energy company Uniper. Expert Tobias Federico explains the consequences for consumers. Munich – The state buys Uniper shares at a bargain price, gas customers will face additional co


Expert on the Uniper rescue: "The surcharge for consumers could increase further"

Created: 07/24/2022, 06:32

By: Matthew Schneider

The federal government has launched a billion-euro rescue package for the troubled energy company Uniper.

Expert Tobias Federico explains the consequences for consumers.

Munich – The state buys Uniper shares at a bargain price, gas customers will face additional costs of two cents per kilowatt hour from autumn.

A good trade?

Tobias Federico, Managing Director of the energy consulting agency Energy Brainpool, explains the risks of the Uniper rescue in an interview.

Was it necessary to save Uniper?

After all, Uniper still has the solvent parent company Fortum - and with Russia simply relied on the wrong supplier.

You have to compare it with the bank bailout during the 2007/08 financial crisis: Uniper is systemically important because the company, as a large importer, buys gas – primarily Russian gas – and sells it to various customers, including industry and public utilities.

Due to the reduced Russian deliveries, Uniper can no longer meet its supply contracts and has to procure the gas on the exchanges - at horrendous prices.

What prices are we talking about?

While gas used to be bought and marketed for 20 euros, today it is a good 140 euros.

For this price, Uniper now has to procure a replacement on the stock exchange, but is only allowed to pass it on for around 20 euros plus a margin because of the supply contracts.

Neither Uniper nor Fortum can bear the difference.

According to the new Energy Security Act, Uniper should pass on the costs directly in the event of a gas shortage - that would secure business operations.

But for the customers that would be unbearable additional costs, which the state would then have to absorb at this point.

With the intervention, the state is mitigating major risks for the economy.

But through the surcharge, consumers pay anyway.

Yes, but spread across all shoulders.

Uniper has an estimated 20 percent market share in Germany.

The surcharge now extends the costs to the remaining 80 percent.

That's still a lot for them: Many people still pay a working price of six cents for gas - the two cents announced by Olaf Scholz make up a good 30 percent.

Imagine if Uniper customers – in a broader sense – would have to bear that alone.

From an economic point of view, the collapse of various factories and private households would certainly be more expensive than the announced gas surcharge.

Scholz wants to pass on 90 percent of the replacement procurement costs, but also spoke of a surcharge of two cents per kilowatt hour.

How does that fit together with the enormously fluctuating stock exchange prices?

Not at all.

It depends on what the government decides for the surcharge.

We calculated that the procurement of a replacement in the event of a total failure of Nord Stream 1 would cost around 30 billion euros - at a market price of 120 euros per megawatt hour.

Currently, 60 percent of the deliveries are missing - that roughly corresponds to the 20 billion euros that the levy of two cents would bring.

But if Putin turns off the gas again, we have to expect stock market prices to rise again.

This means that the levy would have to increase – or the state would have to step in somewhere else.

In any case, consumers should not rely on the announced levy remaining – it could rise further if the state does not pay the difference.

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The credit line was increased by seven billion euros - isn't that enough?

Much of the money will likely be needed for collateral, which is common in gas trading.

The money flows back when it is physically delivered, so this is not a problem for the national economy.

In contrast to buying gas, no money is burned here.

Fortum already wanted to sell Uniper to the federal government - why are you doing the Finns a favor?

Uniper is a 75 percent subsidiary of Fortum.

If the federal government hadn't stepped in, Fortum would have written off Uniper and let it go bankrupt.

Then the supply chain to Uniper customers would have broken off, they would have had to look for other traders who would have sold them the gas in new contracts at the high exchange prices.

In addition, Uniper titles are currently worth around ten euros – the federal government bought them for 1.70 euros.

If Uniper gets back on its feet, it can be a good deal for the state - similar to Lufthansa.

The state earns and the citizens pay?

You have to see it in a larger context.

Gazprom Germania had the same problem: Russia has not supplied the company with gas since it came under the supervision of the Federal Network Agency, and the company has to buy the replacement on the stock exchange.

Here the state stepped in directly with money.

At Uniper, citizens now pay for it directly and not with their tax money.

But in the end you can say: the losses are shared so that nobody is overwhelmed.

Source: merkur

All news articles on 2022-07-24

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