Berlin to bail out UK power plant owner as gas runs short

THE company behind a major fleet of UK power stations has been forced to ask the German government for a bailout after it was thrown into financial turmoil by a fall in Russian gas supplies.

Uniper, which owns eight power stations in the UK and more across Europe, is seeking financial help from Berlin after warning that it had received only 40pc of the gas it had contracted from Russia’s state-owned energy giant Gazprom since mid-june.

The Dusseldorf-based company said this had forced it to buy gas at much higher rates on the open market but it is unable to pass on the costs, leading to “significant financial burdens”.

Uniper has withdrawn financial forecasts and issued a profit warning and is in talks with the German government about “stabilisation measures”.

These could include guarantees, an equity investment, or drawing on a credit line from state-owned KFW. Klaus-dieter Maubach, chief executive of Uniper, said: “The business development has deteriorated due to the war in Ukraine and the consequently strongly reduced gas deliveries from Russia.

“Therefore, we are now talking to the German government again about stabilisation measures, for which a number of instruments can be considered.”

Uniper’s shares fell 14.4pc yesterday to €14.17 (£12.20). Concerns are rising Russia will shut off deliveries to Europe this winter, as it weaponises energy supplies in response to sanctions.

Year-ahead electricity prices in Germany have hit record highs, with analysts at Deutsche Bank warning “the energy market is starting to price a risk of a complete disruption to gas supplies for winter”.

In the UK, National Grid has approached businesses about introducing a new scheme in which they could be paid for cutting their power usage at peak times to help lessen any strain on the system, Bloomberg reported.

Separately, Uniper is also in talks with National Grid about keeping coalfired units in Ratcliffe, Nottinghamshire, open longer than planned.

It comes as Gazprom’s shares plunged by 30pc yesterday after it said it would not pay a dividend for the first time in 30 years.