The next domino to fall

Echoes of the Great Financial Crisis are beginning to show up as the energy crisis continues to exact its toll.

Last night Uniper, the giant German utility issued a profits warning and withdrew its annual forecast. Germany’s largest buyer of Russian natural gas also announced that it was in talks with the government over a possible bailout after only receiving 40% of its contractual volumes from Russia.

The upshot of the supply shortfall is that Uniper has to buy natural gas from the spot market at a significant premium in order to make up the difference. Meanwhile the utility is unable to pass on those higher costs to its customers, squeezing its ability to generate cash and keep operating.