Wien Energie encounters difficulties

In Austria, Wien Energie is experiencing difficulties at a time when energy prices are rising. She is asking the government for financial support.
wien energie difficulties_energynews

The Austrian government announced on Monday that it would have to come to the aid of the country’s main energy supplier, which has become unable to negotiate with wholesalers due to the lack of guarantees, because of soaring prices.

The company “Wien Energie asked the government for financial support last weekend,” Environment Minister Leonore Gewessler wrote on Twitter on Monday.

“We have obviously agreed to this request yesterday at a crisis meeting, because our priority is to ensure the supply of two million customers,” added the green leader.

No quantified details were provided on this aid, which should enable Wien Energie to post a financial guarantee in order to be admitted back to the trading floor of the energy exchanges.

The company, which supplies electricity and gas to the Austrian capital, stressed in a statement “that due to the new price explosion on Friday, this guarantee had unexpectedly increased.”

Wien Energie, which is highly dependent on Russian gas, assures that it remains solvent and that the guarantees provided by the authorities will be returned once the transactions are settled.

It has not yet passed on the wholesale price increase to its customers and was preparing to do so partially in September.

“This situation is already known in neighboring countries,” Wien Energie said. “Energy providers in Germany are facing the same problems and are already using state support as an instrument.”

On Sunday, Austrian Chancellor Karl Nehammer denounced “the madness that is currently raging on the energy markets” and called on Europe to put an end to it by “decoupling the price of electricity from that of gas”.

After six months of war in Ukraine, energy prices in Europe hit new records on Friday, foreshadowing an explosion in the cost of living next winter.

Czech Prime Minister Petr Fiala, whose country holds the EU presidency, announced Friday that his country would convene an emergency meeting of energy ministers.

There are several causes for the explosion in energy costs, starting with the drying up of Russian gas to European countries that support Ukraine. However, 20% of European electricity is generated by gas-fired power plants.

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