Germany braces for victims of energy suppliers
- Consultant Horvath and newcomer Tibber expect some to go bankrupt
- Regulator says consumers can switch providers
- Tibber says state fees and taxes should drop
FRANKFURT, Sept.21 (Reuters) – Some German electricity providers could become insolvent amid soaring wholesale prices hitting consumers around the world and crowding out British companies, energy experts said on Tuesday.
Several small energy retailers in the UK, caught between the promises of bargain prices and the need to cover high purchasing costs, have gone bankrupt. Read more
âWhen electricity futures double, as we’ve seen this year, it can lead to extreme problems when the supplier has to buy dearly in the spot market,â said Andreas Schwenzer, senior consultant at Horvath & Partners.
“This assures us that we will also see bankruptcies in Germany, namely within a few weeks and months,” he said.
Energy prices are skyrocketing due to factors ranging from Asia’s economic recovery to Europe’s carbon-quota policy and a period of lighter winds. Read more
Unlike Great Britain, Germany does not have a price cap for utilities. Its 41.5 million homes buy their energy from a thriving but mostly unguarded retail sector that has been liberalized to create choice and dismantle monopolies.
The Bundesnetzagentur (BNetzA), the country’s regulator, said it was not responsible for monitoring sourcing strategies or pricing mechanisms at suppliers.
âWhen suppliers adjust their prices, they must notify customers and allow them to cancel contracts,â a BNetzA spokesperson said in a written response to questions.
The authority also highlighted the high share of fixed items in household utility bills.
The state holds a 51% share of final electricity bills, mainly to support renewables, which somewhat insulates the final price from fluctuations in the wholesale market.
Digital utility Tibber, a newcomer to the market, said state taxes and fees need to come down.
Tibber views its business model of offering wholesale tracking prices as superior to alternatives guaranteeing prices over certain time periods if not supported by underlying purchases.
“I think there will be bankruptcies of electricity and gas companies in this country in the coming months,” said Marion Noeldgen, managing director of Tibber in Germany.
Reporting by Vera Eckert Editing by Douglas Busvine and Mark Potter
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