4 ms·

> Energy companies are subsidied all the time. About year ago to date a 10 billion subsidy program (in the form of gov backed dirt cheap loans) was started in F

by doikor 3y ago

> Energy companies are subsidied all the time. About year ago to date a 10 billion subsidy program (in the form of gov backed dirt cheap loans) was started in Finland. Uh no. Government gave above market rate short term loans (literally mostly 1 day) so the electricity producers could sell their electricity to the market due to the price being high and the market rules requiring you to put money into escrow as insurance. Basically if you had 200 million worth of electricity to sell and had to put 1 billion into escrow as insurance but did not have that money it meant you could not sell that electricity and it would have driven the price up further forcing every producer to not sell their electricity crashing the whole system.

jampekka 3y ago
You are probably referring to how governments bailed out the Uniper situation? I'm not talking about that. There are a lot of energy subsidies, to the electricity companies and to energy intensive companies. https://tem.fi/-/komissio-hyvaksyi-suomen-energiayhtioiden-valtiontukiohjelmat https://tem.fi/-/komissio-hyvaksyi-suomen-energiayhtioiden-v...
- doikor 3y ago
  No I am not talking about Uniper. I am talking about the exact thing you linked. > Valtiovarainministeriön tukiohjelmasta voidaan myöntää lainoja, joilla tilapäisesti turvattaisiin yhteiskunnan toiminnan kannalta kriittisten sähkön johdannaismarkkinoilla toimivien yhtiöiden likviditeettitarve. Basically says the loans are given to cover electricity derivatives market liquidity needs for companies that are important for society in general (basically all large electricity producers) > Lainoja voi käyttää vain sähkön johdannaispörssikaupan vakuusvaatimusten kattamiseksi. "The loans can only be used for covering electricity derivative market collateral/deposit needs" As I said when someone sells electricity they have to put money into escrow that can be used to cover that electricity production from the spot market in case they fail to produce that electricity for whatever reason (wind did not blow a much as the forecast said, nuclear plant had to be shutdown due to faulty sensor, etc) So if you had a customer on a 5c/kWh 2 year long contract and the spot price for an hour is 2e/kWh you would have to put 2e into the escrow account for every kWh of electricity you sold for 5c/kWh during that hour (meaning you would need 40x your revenue for that day in cash just sitting around) The system makes sense/works well when prices are somewhat normal but needs massive amounts of cash when the prices spike and this is what the government had to help with. Without this loan program there would have been many players on the market with hundreds or thousands of MW of production capacity who would have had to turn OFF their power stations at the moment when the country was almost running out of electricity because they could not have covered the deposits. There is also the municipal owned electricity company version of that with slightly different conditions.

by doikor 3y ago

jampekka 3y ago

You are probably referring to how governments bailed out the Uniper situation? I'm not talking about that. There are a lot of energy subsidies, to the electricity companies and to energy intensive companies. https://tem.fi/-/komissio-hyvaksyi-suomen-energiayhtioiden-valtiontukiohjelmat https://tem.fi/-/komissio-hyvaksyi-suomen-energiayhtioiden-v...

doikor 3y ago
No I am not talking about Uniper. I am talking about the exact thing you linked. > Valtiovarainministeriön tukiohjelmasta voidaan myöntää lainoja, joilla tilapäisesti turvattaisiin yhteiskunnan toiminnan kannalta kriittisten sähkön johdannaismarkkinoilla toimivien yhtiöiden likviditeettitarve. Basically says the loans are given to cover electricity derivatives market liquidity needs for companies that are important for society in general (basically all large electricity producers) > Lainoja voi käyttää vain sähkön johdannaispörssikaupan vakuusvaatimusten kattamiseksi. "The loans can only be used for covering electricity derivative market collateral/deposit needs" As I said when someone sells electricity they have to put money into escrow that can be used to cover that electricity production from the spot market in case they fail to produce that electricity for whatever reason (wind did not blow a much as the forecast said, nuclear plant had to be shutdown due to faulty sensor, etc) So if you had a customer on a 5c/kWh 2 year long contract and the spot price for an hour is 2e/kWh you would have to put 2e into the escrow account for every kWh of electricity you sold for 5c/kWh during that hour (meaning you would need 40x your revenue for that day in cash just sitting around) The system makes sense/works well when prices are somewhat normal but needs massive amounts of cash when the prices spike and this is what the government had to help with. Without this loan program there would have been many players on the market with hundreds or thousands of MW of production capacity who would have had to turn OFF their power stations at the moment when the country was almost running out of electricity because they could not have covered the deposits. There is also the municipal owned electricity company version of that with slightly different conditions.