Page 9 - FSUOGM Week 30 2022

FSUOGM COMMENTARY FSUOGM

German Chancellor Olaf
Scholz.

Uniper’s share price lost 35% of its value when can be up and running before the end of the
the bailout deal was announced on July 22, drop- upcoming winter.
ping to a weighted average of $7.61 per share. The projects will take longer to arrive, and in
Fortum’s stock also took a hit, falling 8.5% in the meantime, Germany has resorted to tempo-
early trading that day to $2.28 per share. Uniper rarily expanding coal-fired power generation to
is due to hold an extraordinary general meeting cut gas use. One of the main proponents of the
to secure shareholder approval for the deal, but European Commission’s proposal to reduce the
with Fortum already committed, this is set to be bloc’s gas consumption by 15%, Berlin is also
a formality. encouraging citizens to conserve energy, and
Uniper, which suffered a $3.2bn loss in the has suggested that it will introduce gas ration-
first quarter as a result of impairment charges ing, although under the current plans, private
relating to its Russian unit Unipro and its households will not be affected.
involvement in the suspended Nord Stream 2 Even though the energy crisis has already
pipeline project, said it would be delaying the begun, Germany went ahead with its plan to
release of its second-quarter results, which close down around 4 GW of nuclear power
had been slated for August 2, until later in the capacity at the end of last year, in line with its
month. post-Fukushima commitment to phase out the
Germany is yet to reveal details on what new power source. But for the first time on July 18,
steps it will take to shield consumers from the the government suggested it might postpone the
inevitable price spike that will result from allow- closure of a further 4.2 GW of nuclear capacity at
ing importers to pass on higher procurement the end of this year.
costs. Speaking to reporters after the bailout deal A spokesman for Germany’s economy min-
was announced, Scholz only said there would be istry told reporters in Berlin earlier this month
“further relief” measures “on a permanent basis” that the government had tasked energy provid-
to protect consumers. ers with running a stress test for the electricity
“You never walk alone,” the chancellor said. grid to determine whether power supplies could
“We will do what is necessary, and as long as it is be guaranteed this winter in the event of a full
necessary, and we will be very stable as a coun- disruption to Russian gas. The results of those
try in facing the challenges on the energy mar- rests could justify keeping the nuclear power
kets amid the Russian war of aggression against plants (NPPs) online for longer, the represent-
Ukraine.” ative said.
Germany has embraced LNG as a means of “From the outset, the question of nuclear
eliminating its need for Russian gas in the long power plants has not been an ideological one
term, with four regasification projects currently for the German government but a purely tech-
in the works. Uniper officially started construc- nical one, which has been the subject of expert
tion work on the first of these terminals, in Wil- reviews and will now be subject to them once
helmshaven, on July 4, and the company has said again under more stringent circumstances,” the
it hopes the 7.5bn cubic metre per year facility spokesman said. ™

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