Uniper and Wien Energie ask for state support as energy crisis deepens

Germany’s Uniper and Austria’s Wien Energie have called for more emergency government support as soaring gas and electricity costs across Europe threaten the ability of utilities to operate.

Uniper, one of Germany’s largest utilities, said on Monday it had requested a €4 billion increase to an existing €9 billion credit line with state-owned bank KfW, which would help secure the company’s “short-term liquidity”.

Wien, Austria’s largest energy company, said wholesale gas and electricity prices were rising so rapidly that it was now struggling to finance its operations. The company, which supplies gas and electricity to around 2 million domestic customers, said it was in talks with the government “to ensure an overall stable situation for the energy supply in Vienna and throughout the country. Austria”.

The calls for further support came after Europe’s benchmark gas price soared by almost a third last week to more than €343 per megawatt-hour.

Russia’s move to choke off gas supplies to Europe has driven gas and electricity prices to record highs, forcing governments to seek alternative supplies and resort to ever-increasing measures extremes to reduce fuel consumption.

Uniper, historically Europe’s biggest buyer of Russian gas, said volumes it received from Russia had fallen 80% since June, forcing it to source alternative supplies at “significantly higher prices” – resulting in cash losses of “much more” €100mn per day.

The Düsseldorf-based company is a major gas supplier and one of Europe’s largest electricity generators with a capacity of 34 gigawatts. It has around 600 customers in Germany and neighboring countries, ranging from industrial customers and municipalities to regional distributors.

The rapid rise in prices further increased the margin – or collateral – payments Uniper was required to make to exchanges when it traded gas and power, the company added, which had “a significant impact on the liquidity situation in recent days”.

As a result, Uniper said it had drawn the remaining €2 billion from KfW’s €9 billion credit line agreed in July as part of a €15 billion bailout. and that he would have to borrow more. Last month, the company said it had become a “pawn” in the Ukraine conflict by posting a first-half loss of 12.3 billion euros.

“We are working at full speed with the German government on a permanent solution to this emergency, otherwise Uniper will no longer be able to fulfill its critical function for Germany and Europe,” said Uniper CEO Klaus – Dieter Maubach.

KfW and the German government declined to comment.

EEX, Germany’s energy derivatives market, has also called on governments to provide more support to utilities struggling to meet margin requirements when buying and selling gas and electricity.

“[It is] It is very important that companies receive support in guarantee of financing (margins) not only from Germany as so far, but also from other member states or the EU,” he said on Monday. . On Friday, the German power futures price rose by more than a fifth to 985 megawatt hours.

Peter Hanke, head of the city of Vienna’s finance ministry, told the Austrian News Agency that Wien Energie could demand up to 6 billion euros from the federal government to help it meet margin calls on the contracts.

The city had already provided the company with emergency funding, he said, but did not have the resources to continue doing so on its own. He stressed that the underlying business of Wien Energie was sound and profitable.

Austrian Chancellor Karl Nehammer has said he will propose a European cap on electricity prices at an upcoming meeting of EU energy ministers.

“We must finally put an end to this madness that is currently taking place in the energy markets – and that can only be done through a European solution,” Nehammer said.

Record energy prices have already forced the German government to reactivate mothballed coal-fired power plants, encourage industrial companies to reduce gas consumption and set strict targets for gas storage levels until November, 1st.

Robert Habeck, Germany’s economy minister, said on Monday German gas storage levels were already at around 83% and would hit the 85% target originally set for October by early next month.

“We have made more progress in filling the storage than required by law,” he said in Munich on Monday. The ability to tap into stored gas meant that Germany “no longer has to pay [for gas] at all costs,” he added.

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