https://markets.businessinsider.com/information/commodities/europe-energy-crisis-volkswagen-trading-profit-natural-gas-prices-hedge-2022-9
Volkswagen will rake in large buying and selling income from early hedges on pure fuel, sources advised Bloomberg, as Europe’s power disaster has despatched costs hovering whereas additionally forcing business to depend on various sources.
The auto big is promoting 2.6 terawatt-hours value of pure fuel contracts again into the German market, sufficient to warmth about 200,000 properties for a 12 months.
The corporate started buying the fuel in 2020, when costs had been about 30 euros per megawatt hour. They’ve since skyrocketed to round 200 euros amid the fallout of Russia’s invasion of Ukraine.
Primarily based on present costs, the buying and selling income would whole about $400 million, although the eventual quantity will depend upon worth fluctuations because the contracts are bought throughout a number of weeks, in line with Bloomberg.
Volkswagen initially deliberate to make use of the pure fuel to energy the corporate’s two amenities in Wolfsburg because it switched away from coal. The worsening power image in Europe has the corporate sticking to coal for energy within the meantime, permitting its fuel to ease stress on power markets
The German authorities has been pressuring industries that want giant quantities of power to preserve fuel and guarantee reserves for the winter, when heating demand jumps.
Volkswagen plans to make use of the income from its fuel hedges to offset the prices of switching to coal or gas oil for power and changing or retrofitting equipment, sources advised Bloomberg.