Financial TimesFinancial Times

Why are Europe’s power producers running out of cash?

By Philip Stafford and Tom Wilson

06 Sep 2022 · 4 min read

Editor's Note

Electricity generators are very short of cash despite the fact that electricity is selling for record prices. Some fear a “Lehman Brothers moment.” The FT explains why the industry is reeling.

Record power prices driven by the soaring cost of gas as Russia chokes supply to Europe are presenting European utilities with an existential problem: despite selling electricity at record prices, they are running out of cash because of spiralling collateral requirements.

Finland has warned that the energy sector faces a potential “Lehman Brothers” moment if governments do not step in to provide emergency funding. Others are calling for a complete overhaul of the way power is traded.

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