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City Experts: $2 Trillion Surge in Europe Energy Bills by 2023

It’s official: the energy scam is now out of control and threatening the stability of the major G7 countries. Despite all the grand rhetoric, no western leader has dared to step forward and condemn the unmitigated disaster of the wholesale energy market scam being used by western financial institutions and corporations to price-gouge consumers with extortionate rates and push tens of millions into fuel poverty this winter. On top of this, the fraud being perpetrated by energy firms and City institutions is driving runway inflation – at a time when people can least afford it. Add to this the crazed ‘Zero Carbon’ green policies and the failing sanctions against Russia being implemented by governments – and you have a perfect economic storm in the West.

As a result of this highly coordinated fraud being run by governments, banks and energy firms, thousands of pubs in the UK now face closure due to out of control energy bills. All this, coming at a time when the beverage and hospitality industry was still battling to get back on its feet following forced government shutdowns due to the fear of Covid-19 – a crisis which hit hospitality particularly hard and left many businesses with punishing debts.

Based on a recent survey of half of the UK’s 47,000 pubs, many tenants have already been giving their notice because they simply cannot not cope with their over-inflated energy bills – which are due to rise fivefold in some cases.

Unlike households, businesses will not benefit from a proposed government cap on what suppliers can charge for gas and electric, leaving small to medium-sized business literally out in the cold.

Based on this latest report from City financiers, thing are expected to get even worse in 2023…


Bloomberg reports…

Energy bills for European households will surge by 2 trillion euros ($2 trillion) at their peak early next year, underscoring the need for government intervention, according to Goldman Sachs Group Inc. utilities analysts.

At their height, energy bills will represent about 15% of Europe’s gross domestic product, the analysts, led by Alberto Gandolfi and Mafalda Pombeiro, wrote in a note dated Sunday.

“In our view, the market continues to underestimate the depth, the breadth and the structural repercussions of the crisis,” they wrote. “We believe these will be even deeper than the 1970s oil crisis.”

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Stock investors are too pessimistic about the effect of regulatory efforts, Goldman said. Some of the steps being considered — including price caps and a so-called tariff deficit — could ease the overhang on stock prices by smoothing the increase in tariffs, limiting the near-term drop in industrial production, and largely defusing regulatory risk, the analysts wrote.

The increase in energy bills has prompted a rush by governments to ease cost pressures on households and businesses. EU energy ministers will meet Friday to discuss measures including natural gas price caps and suspension of power derivatives trading. France and Germany support windfall taxes on energy profits.

SEE ALSO: Truss Drafts £130 Billion Plan to Freeze UK Energy Bills

The introduction of price caps in power generation could save the bloc around 650 billion euros in power bills and offer consumers and markets some relief while allowing governments to forgo a windfall-profits tax, the Goldman analysts said.

Investors should favor shares in companies that are developing renewable-energy sources, since they should benefit from structurally higher-for-longer energy prices, the analysts wrote, highlighting RWE AGEnergias de Portugal SA and Orsted A/S.

Price caps wouldn’t fully solve the affordability problem, meaning a tariff deficit might be needed to spread the spike in bills over 10-20 years, Gandolfi and Pombeiro said. Utilities would need to be able to securitize those future payments, allowing them to avoid an excess burden on their balance sheet…

Continue this analysis at Bloomberg 

READ MORE ENERGY NEWS AT: 21st Century Wire Energy Files

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