Vattenfall Reaps Profits via "Enron-Like" Behavior

January 10th, 2011
in News, econ_news

Econintersect:  According to a report on Swedish Television SVT (Swedish), Vattenfall has reduced its nuclear power output this winter, which caused a price hike in the Swedish energy market. The state-owned firm confirms that it then sold hydro-energy to fill in the gap, making handsome profits  of around €100 million.  This report comes from Dirk Ehnts, University of Oldenberg (Germany).

Follow up:

 Swedish nuclear power has been very unreliable in the last years, reaching only 63% of capacity in 2009, according to IAEA statistics.  The TV documentary also presents statistics of the IAEA which shows that Sweden tops the list of countries ratios of emergency shutdowns in nuclear plants.

Editorial commentIt seems to be very unfortunate that an energy company can profit from its own mistakes. A diversification of energy is surely nice to have. However, moral hazard problems might arise, just like in the case of Enron, which deliberately instructed power plants to stop. So far, Vattenfall has not had to declare why nuclear power plants shut down so often. The company had experienced problems with its German nuclear power plant at Krümmel in 2009, which led to fierce protest over the company's weak crisis management (German).

Source:  Dirk Ehnts at econoblog101.

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