Gas: German companies begin to cut customer contracts

DEP Deutsche Energiepool GmbH of Lower Saxony announced on Friday that it would " completely cease the national supply of natural gas ". Many customers have already had their supply contracts terminated. The company now wants to "focus on services in the energy sector".

In recent months, the supply prices of natural gas and electricity on the futures market have tripled and the prices for short-term supplies have risen about five times, the company justified the drastic step: "Almost no one in the energy market he expected such a rapid and unprecedented development ».

In August 2020, a megawatt hour of natural gas cost € 4.80 in the spot market. In the meantime, prices of 75.04 euros have been reached. Growth may not end right away.

The trend of the spot market reflects the price peaks, but in fact the situation on the European gas market has worsened throughout Europe in recent months. After a cold winter in which gas storage facilities were emptied, the demand for gas remained unusually high. On the one hand, the global economy recovered much faster than expected after the corona pandemic. So Asia's starvation for gas, for various reasons, has sent the price skyrocketing on LNG.

Prices for this fossil energy source have risen unusually sharply since January. On average in the long term, a megawatt hour (MWh) of natural gas normally costs between 15 and 20 euros. However, the price is currently 65 euros per MWh. The situation in Great Britain is particularly tense. Seven energy companies have already gone bankrupt this year.

Interested customers of Deutsche Energiepool will continue to source gas. Energy company Eon announced it would intervene. According to its own statements, the company is the responsible base and replacement supplier in “much of Germany” and must ensure delivery, usually at higher prices than low-cost suppliers on the Internet.

Unlike low-cost suppliers, traditional suppliers do not buy short-term, but staggered purchases on the futures market. “We purchase the quantities of energy needed in the long term and with foresight to avoid the price spikes we are currently experiencing in the interest of our customers,” said Christoph Müller, Energy Manager at Eon. This safeguards supplies, but only partially: the peaks must be purchased on the spot markets and it is complex to cover supplies only with future supplies. In addition, delivery contracts must be respected to give real protection.

This time E.on put a patch on it, and the next one?

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The article Gas: German companies begin to cut customer contracts comes from .

This is a machine translation of a post published on Scenari Economici at the URL on Sat, 25 Sep 2021 07:00:55 +0000.