German utility Uniper has recorded a €12.3 billion first-half loss, being pushed to the “brink of insolvency”, as the Financial Times reports. The Russian invasion of Ukraine and subsequent fall-out has been the main cause, and the chief executive Klaus-Dieter Maubach has said that it is “almost impossible” to predict second-half performance, given the uncertainty of the situation, amid the grim winter outlook for energy supplies in Europe. (It is estimated that if German gas storage capacity was 95% full, it would be enough to supply the country for two winter months. Storage is currently around 77%.)
Much of Uniper’s financial misfortune has come from being forced to buy gas on the open market at elevated prices rather than at the discounted prices it had enjoyed previously under its long-term deal with Gazprom. Despite the uncertainty, the company believes it will continue making losses for the next 18 months, and hopes to return to profit in 2024. A federal government assistance package, which involved the government becoming a shareholder in the company, was recently agreed, and from October Uniper will be able to pass on 90% of higher energy prices to consumers, which will no doubt cause considerable hardship amongst ordinary Germans.
As part of that assistance package, the German federal government has forced Uniper to terminate a lawsuit it had begun against the government of the Netherlands over moves to oblige coal-fired power plants in the country to close by 2030. With both countries being signatories of the Energy Charter Treaty, Uniper had a mechanism to sue over the closures; fellow German utility RWE is persisting with its own case against the government of the Netherlands.