Gas, anger at Francesco Starace: “Amsterdam prices are crazy, unjustified increases”

The Ttf Amsterdam gas index “went crazy when it became clear what was happening in Russia, but it doesn’t 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’ve always tried to achieve is not so much a cap on the price of gas, but a cap 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 with formulas that have TTF as a parameter and we know how much 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 euros when it was cheap and 30 euros 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.”

For the CEO of Enel, the Ttf index in Amsterdam, “we began to understand about a year ago that when gas cost 80 euros and then reached 300 euros, it began to be included in the mechanisms that set 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, “has not 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 It simply has an almost psychoanalytic value in terms of the perception of the risk that exists in Europe on Russian gas supplies.” Therefore, linking the price of gas across Europe to this index “is a mistake. It is a war that we cannot win, as the influence of 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 to talk seriously about it in Europe, the price dropped from 300 to 200, which is not a price anyway, but crazy. o I know how many gas purchase contracts are linked to the TTF, we don’t have any, but I think it’s best that everyone stop playing and get hurt. This index is no longer credible and there is nothing wrong with trying to get it back on track.”

As for the extra profits of energy companies, “the point 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 paid 50 million euros, which is the advance, and we will end up paying 70 million euros, which is the total amount. We have to pay for it, we were never opposed to it.” “But – Starace adds – if there is a disappointment in the total revenue of this tax it means two things: either there is no extra profit as previously thought or the tax was made where it should not have been made and these extra profits were not paid. extras, we have said so many times».