When a CEO invites you to a press conference so close to the weekend, the situation must be pretty serious. “Unusual on a Friday afternoon,” said Uniper boss Klaus-Dieter Maubach at the end of last week, when he appeared in front of the press in a dark suit in front of a white and gray background. “Unusual” is perhaps an understatement at this point. Politicians may be calling for energy saving and short showers these days and people are in the mood for an icy winter in gloomy apartments – all of this is perhaps nothing compared to what is going on at this Düsseldorf corporate headquarters.
Because nowhere can the smoldering energy crisis be pinned down as well as with Germany’s largest gas trader Uniper, which was created in 2016 as a spin-off from the energy supplier Eon. A company that supplies hundreds of major customers, from municipal utilities to industrial companies, and is therefore something like the aorta of the energy system. The business model of this central gas vein: imports, cheap and from Russia, which have been preferred for years, are therefore extremely lucrative gas trade, the operation of gas storage facilities and gas and coal-fired power plants. What happens to such a company and its business model when the gas superpower Russia invades Ukraine, when Russian supplies through the Nord Stream 1 pipeline are throttled or even cut off, when everything is on the brink and when nothing is really predictable and is calculable? Then everything very quickly becomes a case for stress test experts and stochastics.
How to prevent the system from collapsing?
And so these days it’s about more than the question of the politically correct water temperature in the swimming pool. How to prevent a system from collapsing? This is currently the subject of heated negotiations between Düsseldorf, the federal government in Berlin and Finland. Finland? This is where the major shareholder Fortum is based. The third-largest energy company in Scandinavia holds around 80 percent of Uniper’s capital and in turn is around 50 percent owned by the Finnish state. If you like, the question of Germany’s energy supply is also a Finnish question – which doesn’t make things any easier.
Finland would now very much like to stay out of it. According to Maubach, Fortum has already committed itself “excessively” and released eight billion euros for loans and guarantees. There shouldn’t be more, the responsible Finnish Minister for Europe, Tytti Tuppurainen, made it clear at the beginning of the week that Fortum no longer wanted to be involved in the Uniper rescue project. Fortum would prefer to pass on the currently badly hit German gas business to the federal government, which would de facto be a dismantling of Uniper. It must be about “merging the endangered and systemically important areas of Uniper and securing them permanently,” says Fortum boss Markus Rauramo. And under the control of the German state, which has the necessary creditworthiness.
This is interesting because it shows how much times have changed in just a few years. Just two or three years ago, Fortum was trying very hard to get as many shares in the group as possible. Even against fierce resistance in Düsseldorf, where the advances were initially classified as “enemy advances”. Sure, back then you still made a lot of money with Russian gas. A war in Europe and an energy crisis later, things look different.
Europe Minister Tuppurainen should, reports the news agency Reuters citing a Finnish government representative, will travel to Berlin this Thursday to negotiate a possible rescue of Uniper. Meetings with the federal government and managers from Uniper and Fortum are planned. Is a solution near?
How to prevent the system from collapsing?
Time is of the essence, because Uniper is losing a lot of money, and in order to be able to continue to honor customer contracts, the company first has to get much more expensive gas in order to be able to guarantee the supply – while there is still some. However, the extremely high prices cannot be added to the bills because the originally agreed prices are lower. And then, at some point, in the worst case? “A very, very big price wave is rolling towards German consumers,” says the Uniper boss. The only problem is that neither consumers nor companies like price waves, let alone very, very big ones.
If hardly any gas arrives in Europe, then the storage facilities will remain empty. In the picture: A Uniper gas storage facility in Bierwang.
(Photo: Andreas Gebert/Reuters)
Uniper boss Maubach has long since decided – for a multi-billion dollar rescue by the federal government. State aid will become possible after the Federal Council approved the amendment to the Energy Security Act on Friday. “Uniper experiences daily cash outflows in the mid double-digit million range – a situation that we can no longer sustain,” he says. So it’s not just about the gas supply, it’s about the group itself.
What all this should look like in detail is far from clear. The federal government could get into Uniper, acquire a stake of 25 percent or more and provide a few billion euros in the process. There are regular and “trustworthy discussions” with the federal government, says the manager, who “recognized the seriousness of the situation”.
Will Uniper be broken up now? The workers want to prevent that
And German politics? Economics Minister Robert Habeck (Greens) would also like to get the owner from Finland on board. Because whoever owns also has responsibility.
The open question remains: What exactly would such a participation look like? Should Uniper be broken up, as Fortum has in mind? Uniper works council chief Harald Seegatz has already made it clear that there will be no participation. “The state should participate with a majority in the entire company so that it remains as a unit,” he said now. But with a stake in the entire Uniper Group, the federal government would then get involved in nuclear and coal-fired power plants again, since Uniper operates nuclear power plants in Sweden, among other things.
The next big issue.