Summary of Runder Tisch: Wien Energie - Der Milliardenkrimi (30.8.2022)

00:00:00 - 00:35:00

In this YouTube video titled "Runder Tisch: Wien Energie - Der Milliardenkrimi (30.8.2022)", participants discuss the financial chaos in the energy sector and the challenges faced by Wien Energie, a regional energy provider. There is debate about whether the actions taken by Wien Energie can be classified as speculation or risky business behavior, with concerns about underestimating liquidity risks in hedging transactions. The panelists discuss the ability of Wien Energie to fulfill its financial obligations, with the general consensus that there will be some financial impact but optimism remains. The discussion also touches on market conditions, future energy prices, liquidity support, and risk management in the energy sector. The importance of market intervention to address price fluctuations and liquidity problems is emphasized, along with the need for proactive measures and discussions on these issues. There are also discussions about potential remedies such as insurance policies or industry-led deposit protection schemes. The concerns of customers regarding rising electricity bills and the impact of the climate crisis on energy production are also addressed. Overall, the discussion highlights the complexities and uncertainties in the energy sector and the need for careful consideration and effective solutions.

• 00:00:00 In this section, the participants of the round table discuss the financial chaos that has emerged in the energy sector, with energy companies suddenly needing to secure their liquidity and discuss possible bailout measures. Peter Weinelt, Chairman of Wien Energie, assures that they have the necessary securities to meet their future delivery commitments and can finance their operations. However, there is a distinction to be made between delivering to their two million end customers and fulfilling the futures contracts they have entered into with other market players. Barbara Schmidt, Secretary General of Oesterreichs Energie, clarifies that Wien Energie is a reliable company that conducts business directly for their customers and ensures a secure energy supply. The discussion also touches on the surge in energy prices and the challenges faced by Wien Energie in balancing their power and heat generation during high-demand periods, especially in winter. Despite the financial uncertainties, Weinelt confirms that Wien Energie can fulfill its delivery obligations.
• 00:05:00 In this section, the discussion revolves around whether the actions taken by Wien Energie can be classified as speculation or simply risky business behavior. The concern is that the company underestimated the liquidity risk involved in their hedging transactions, which has now become a pressing issue. The panelists also debate whether the transactions were completed before the onset of the economic war, as it would have been highly unlikely for such conditions to arise. One panelist defines speculation as increasing the risk of a transaction, which is likely what happened in this case. The issue of what could have been done better, such as considering alternative instruments and ensuring liquidity, is also addressed, but without diving into too much detail about how such risks are managed internally at Wien Energie. The focus then shifts to the ability of Wien Energie to deliver the funds in question and whether there will be any financial scandal or loss of funds. The general consensus is that there will be some financial impact, but the exact extent will depend on the availability of liquidity. Despite this, the panelists express optimism that there will ultimately be a profit remaining, although it may be diminished. The potential implications for taxpayers are mentioned, and it is acknowledged that lessons will need to be learned and improvements made. The discussion concludes with the acknowledgement that the situation is complex and dependent on various factors, including the future development of energy prices.
• 00:10:00 In this section, the speaker discusses the changing market conditions and the uncertainty surrounding the future prices of energy. While daily fluctuations can occur, the focus should be on whether the billions of dollars the government may have to provide as security will be returned or lost. The speaker suggests that other countries have already explored providing liquidity support in such cases. However, it is important to note that as long as the quality of the contract is maintained, the money will be returned. The speaker also highlights the possibility of minimizing losses by waiting for physical delivery of the contracted goods. The discussion touches on the speculation and risk associated with such business deals. The speaker argues that buying and selling on the stock exchange is a normal part of the energy market and has been since its liberalization. However, ensuring sufficient security amid fluctuating energy prices has become more challenging. The importance of liquidity and adequate resources for companies to meet their obligations is emphasized.
• 00:15:00 In this section, the discussion revolves around the actions of Unternehmen, particularly Wien Energie, and whether their behavior of increasing liquidity by selling at the stock market is normal or speculative. The participant argues that while selling at the stock market is a normal business practice, there is a risk when offering a large amount of energy production for sale. However, this is necessary to ensure the provision of district heating to customers. The participant emphasizes that the strategy of buying gas and selling electricity is a risk mitigation measure rather than a speculative activity. Energy experts also support this view and consider it a standard model for gas power plants. The discussion highlights the unpredictability of various factors, such as Russian gas deliveries, energy crises in France, and extreme weather conditions. While the term "speculation" is mentioned in the political debate, the participant does not associate it with the actions of Unternehmen in this context.
• 00:20:00 In this section, the participants discuss the importance of risk management and the need for a serious approach to the topic. It is noted that while the effects of speculation and market volatility may be felt by individuals, the risks should have been known and addressed earlier. The recent increase in energy prices and the resulting financial challenges faced by Wien Energie are highlighted. The participants emphasize the need for proactive measures and earlier discussions on liquidity issues and potential market interventions.
• 00:25:00 In this section, the discussion revolves around the topic of market intervention and liquidity issues in the energy sector, particularly in Austria. The speakers mention that while they were initially against market intervention, recent events have highlighted the need for temporary measures to address price fluctuations and liquidity problems. They emphasize the importance of carefully considering and developing effective solutions, as no perfect model has been devised thus far to handle the scarcity and high prices in the gas market. The conversation then shifts to the adjustment of the merit order price and the general challenges faced by the electricity market. The need for short-term measures to curb price volatility is highlighted, with the upcoming summit on September 19th being mentioned. The speakers discuss how liquidity issues can affect the market, and the potential impact on supply and demand. The discussion concludes with a reflection on the functioning of the market and the impact on customers if prices continue to rise.
• 00:30:00 In this section, the participants discuss the issue of market functioning and the accusation that Putin is systematically destroying the European electricity market. They also address the concerns about potential liquidity problems faced by other energy providers. The suggestion of implementing a legally mandated insurance policy or a industry-led deposit protection scheme is proposed to prevent future liquidity shortages. The idea of taking responsibility within the industry is emphasized, as some energy companies are thriving while others are struggling. They also note the political complexities of bankrupting publicly-owned companies in the Austrian energy sector.
• 00:35:00 In this section, the speaker discusses the concerns that customers of Wien Energie, the regional energy provider, have regarding rising electricity bills and the impact of the climate crisis on energy production. While the government is working on solutions to address the issue of high prices, the speaker emphasizes that the supply of energy in Austria remains highly secure compared to other countries. However, they also highlight the importance of ensuring liquidity for energy producers and the need to avoid any disruptions in the production sector. The discussion concludes with a mention of the potential political implications of the ongoing situation.