Gas, anger by Francesco Starace: "Amsterdam prices are madness, unjustified increases"

Gas, anger by Francesco Starace: “Amsterdam prices are madness, unjustified increases”


Gianni Di Capua

The Ttf Amsterdam gas index “went crazy when it became clear what was happening in Russia, but it does not reflect a tension between supply and demand”. This was stated by Francesco Starace, CEO of Enel, on the sidelines of the Yhe European House – Ambrosetti forum in Cernobbio. «What we have always tried to achieve is not so much a ceiling on the price of gas, but a ceiling on the volatility of the Ttf index to which gas is conventionally linked in Europe. We buy gas from the United States, Azerbaijan, Algeria and we don’t buy it with formulas that have the TTF as a parameter and we know what it costs, ”he explained. Starace explained that «the price of gas in Europe in the last seven years has fluctuated on average between 20 euros and 30 euros per MWh, 20 when it was cheap and 30 when it cost a lot. Today we have a situation where these numbers are multiplied by ten. Is it true that gas costs so much? The answer is no. It doesn’t cost that much at all. “

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For the CEO of Enel, the Ttf index in Amsterdam, “we began to understand about a year ago when gas cost 80 euros and then reached 300 euros, it had begun to insert into the mechanisms that fix the conventional price of gas in Europe of geopolitical risk considerations that have nothing to do with the price of gas ». The TTF, he explained, “hasn’t reflected the tension between supply and demand for a long time, it has nothing to do with the price of the raw material that is bought. It simply has a value, almost psychoanalytic, as regards the perception of the risk that exists in Europe on gas supplies from Russia ». So linking the price of gas across Europe to this index «is a mistake. It is a war that we cannot win, since the leverage on the other side is infinite ». For Starace «putting a cap on the volatility of this index would be a solution. As soon as they started talking seriously about it in Europe, the price dropped from 300 to 200, which in any case is not a price but a madness. I don’t know how many gas purchase contracts are linked to the TTF, we don’t have any, but I think it’s better for everyone to stop playing and hurt themselves. This index no longer has any credibility and there is nothing wrong with trying to put it a little bit on track ».

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As for the extra-profits of energy companies, «the issue is to understand where they are before you want to tax them, because if you don’t understand where the target is, you shoot at random and the result is what it is. We have paid 50 million euros, which is the down payment, and we will end up paying 70 million euros, which is the total amount. We have to pay this, we have never objected to this ». “But – adds Starace – if there is a disappointment on the total revenue of this tax it means two things: either there is no extra profit as previously thought or the tax has been made where it shouldn’t have been done and these extra profits are not been paid. We have not had extra profits, we have said so many times ».

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