Germany nationalizes Uniper to protect energy security
“The decision was made,” German Economic Affairs and Climate Minister Robert Habeck said at a news conference, “to ensure security of supply for Germany.”
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The step became necessary as the situation has changed over the past few weeks, Habeck said. Conditions have worsened, he said, particularly since Russia halted all gas deliveries through the Nord Stream pipeline in early September.
The German state will purchase the shares it did not already own for 1.70 euros per share — a fraction of the company’s stock price, which hovered close to 40 euros per share before Russia invaded Ukraine in late February. The deal still needs to be approved by the European Commission.
Uniper, which is one of Europe’s largest gas companies, has struggled in the wake of the energy market turmoil following Russia’s invasion of Ukraine. The company, which imports roughly 50 percent of its gas from Russia, announced that reduced deliveries led to a 12 billion euro loss ($11.8 billion) in the first half of 2022.
Klaus-Dieter Maubach, Uniper’s CEO, said the move to nationalization was necessary due to the worsening conditions and pledged that the company would do “its part in overcoming the energy crisis.”
Ben Cahill, a senior fellow at the Center for Strategic and International Studies, said he did not expect the bailout to be the last of its kind but could just be the start of nationalizations across the continent.
“This is part of the bigger trend that we’re going to see really heavy state intervention into energy markets,” he said. “In some cases, it’s bailing out politically sensitive or economically vital companies like Uniper, and others it’s redesigning markets, price caps, interventions and to a capacity prices. So this is not the end.”
The bailout comes on the heels of an announcement last week that Germany would place two subsidiaries of the Russian oil giant Rosneft, which account for more than 10 percent of Germany’s total oil processing capacity, under the administration of Germany’s Federal Network Agency. The decision came with the explicit aim to “prevent the refusal of services to the companies with ties to Russia from negatively impacting the ongoing business operations.”
“The entry of the state is the right step in this situation,” German economist Veronika Grimm told The Washington Post via email.
Germany’s gas storage has reached more than 90 percent of capacity, despite the recent pipeline shutdown, according to government data. For months, the German government has staunchly vowed to support Uniper because of the company’s key role within the country’s energy infrastructure.
“We will not allow a systemically relevant company like Uniper to fail, thus jeopardizing Germany’s energy security,” Habeck said in July. “The shortage of energy that has been artificially created by Russia is not a normal fluctuation that the market can digest.”
Cahill described Uniper’s importance to Germany more simply. “Uniper is too big too fail,” he said.