Utility shares on the rise; the market considers a cap on gas prices for thermal power generation
Attention is turning to a possible agreement between the Italian Government and the European Commission to introduce a cap on the price of gas used in electricity generation at around 60–65 euros per megawatt-hour
Le ultime da Radiocor
*** Russia: attacco ucraino con droni e missili a raffineria nella regione di Ryazan
*** Dpb: impatto misure Manovra 0,54% del Pil, vale 23,5 miliardi
E21: -0,5% mensile produzione industriale agosto, -1,1% annuo (RCO)
(Il Sole 24 Ore Radiocor) - Utility shares are rising on the Milan Stock Exchange, whilst the market is watching for a possible agreement between the Italian Government and the European Commission to introduce a cap on the price of gas used in electricity generation at around 60–65 euros per megawatt-hour, as previously reported in recent days by Il Sole 24 Ore. This cap is around 20 euros below the November TTF gas futures in Amsterdam (-1.5% to 85.8 euros). Thus, in a weak Piazza Affari, Snam gained around two points, whilst Terna , Hera , Enel and Italgas .
The mechanism under consideration would require gas-fired power stations to submit bids on the electricity market using the price set by the cap as a benchmark, and then receive a reimbursement for the difference compared with the actual cost of the fuel, “charged to consumers via their bills”, explains Banca Akros, which estimates that – with a cap of 65 euros – the single national price (PUN) could fall to around 165.6 euros per MWh and, with a cap of 60 euros, to 155.6 euros. These figures are significantly lower than the 213.6 euros shown in the simulation without intervention. Taking into account the refund passed on to consumers, the net saving would be in the region of 27–33 euros per MWh, equivalent to 13–15 per cent.
“Consumers still make a net saving, whilst producers of hydroelectric and renewable energy sell their electricity at a lower price,” summarise the experts, who point out that ARERA (Regulatory Authority for Energy, Networks and the Environment) “sets limits on this reduction, in order to prevent Italia from ending up exporting low-cost energy to neighbouring countries”.
Analysts, however, play down the direct effect on the accounts of electricity companies: ‘We see a limited impact on utilities exposed to electricity generation’. Italian companies, they explain, normally hedge their production around a year in advance and the wholesale price simulated under the new mechanism is broadly in line with one-year forwards. Consequently, “the price cap merely eliminates any further scope for price rises resulting from recent spikes in gas prices”.
