The threat of energy rationing in Europe is still real as the German regulator warned that there will likely be gas shortages this winter.
(Bloomberg) — The threat of energy rationing in Europe is still real as the German regulator warned that there will likely be gas shortages this winter.
Gas contracts rose for a third day as traders weighed the efficacy of European Commission interventions to try to reduce prices.
Utility Electricite de France SA warned of a 29-billion-euro ($28.9 billion) hit to earnings as it struggles with extended outages at its nuclear fleet. The demand for imports of electricity to France is likely to be a big driver of power prices this winter throughout Europe.
The French government expects the crisis to last beyond this winter as it set aside 16 billion euros to limit power and gas price increases for households and small companies next year to ease the burden of the energy crisis on consumers.
Key Developments:
- Europe Prepares Blackout Plans to Head Off Winter Energy Chaos
- Europe Gas Rises as Traders Weigh Impact of EU Intervention Plan
(Timestamps in London.)
Gas Prices Rise (8:40 a.m.)
Natural gas increased for a third day as traders weighed whether Europe’s steps to contain the energy crisis will be enough to curb costs after a price cap proposal wasn’t included.
Benchmark futures rose as much as 12% to 244.5 euros a megawatt-hour. Uncertainties remain on how the measures will be implemented as member states are divided and have to sign off on. The proposals also didn’t include any solutions on how to add gas supply to a market that’s been tight ever since Russian shipments were cut.
EDF Sees Earnings Hit From Low Nuclear Output (8:20 a.m.)
Electricite de France SA is expecting a 29 billion-euro hit to earnings as it grapples with extended outages at its nuclear fleet. The company has given the government assurances that it will make every effort to get more stations back online this winter.
The estimated hit to earnings before interest, taxes, depreciation, and amortization has widened by 5 billion euros.
German Regulator Warns of Gas Shortages (8:05 a.m.)
Germany will likely face “waves” of gas shortages this winter, Klaus Mueller, president of the country’s energy regulator, told Handelsblatt in an interview. There isn’t a clear plan yet for which industries would have supplies rationed yet, he said.
“I expect waves: there are gas shortages, they go, they come back, they appear here, sometimes there, possibly throughout Germany,” Mueller said. “If we get a very cold winter, we have a problem.”
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