European utilities rise after report on EU plans for non-gas electricity price cap

VERBUND AG

07/09/2022 12:12

** Shares in European utilities jump after a report https://www.ft.com/content/ab469e2d-8e87-44ee-855b-f46b5b2dd17e
 that Brussels was working on a 200 euro megawatt hour limit to
the price of electricity generated by non-gas power producers
    ** The STOXX Utilities index  .SX6P  was up 2.6% by 1107, on
track for its best day since July and outperforming European
benchmark STOXX 600  .STOXX  index, which slipped 0.6%
    ** "A limit to the electricity price would ease the risk of
Ørsted (and other energy producers) having to secure further
liquidity to pay margin-calls on hedges," Sydbank analyst Per
Fogh said
    ** Jefferies analysts said that they see the cap as a
better-than-expected outcome for generation companies
    ** "If true, we see €200/MWh as a better than-expected
outcome: it would provide relief on bills to consumers (reduce
MtM bill by 20% and limit further increases to 1H22 bill by
35%), whilst keeping incentives for investments and energy
efficiency," they said in a note
    ** Austria's Verbund  VERB.VI , which generates most of
electricity from hydropower, jumps 13.5%
    ** Among other top gainers are RWE  RWEG.DE  SSE  SSE.L ,
EDP  EDP.LS  and Engie  ENGIE.PA , up between 4% and 8%
    ** Germany's Encavis  ECVG.DE , which produces electricity
from renewable sources, gains 10%, while Denmark's Orsted
 ORSTED.CO  is up 4.8%
    ** Uniper, the only faller in the utilities sub-index, is
down 7.9%

 (Reporting by Valentine Baldassari, Juliette Portala, Jagoda
Darlak and Tristan Chabba)
 ((Valentine.baldassari@tr.com))