Ecotricity looked at the implications of breaking Gazprom contract

The boss of the energy firm said breaking the contract could trigger a penalty of around £10 million

British energy firm Ecotricity has unveiled its commercial links with Russian companies as the pressure on companies to cut ties with Kremlin-linked companies is mounting.

Dale Vince, Founder of Ecotricity wrote on LinkedIn: “We have a trading relationship with them (Gazprom), that much we knew, they are one of about a dozen counterparties with whom we trade energy.

“We dug into the numbers in our trade book – turns out 5% of our gas is bought in advance (hedged) with Gazprom, for the next 12 months.”

In the last couple of weeks, several companies, including Centrica and local authorities have decided either to terminate or not renew their current contracts.

Mr Vince continued: “We looked at the implications of breaking that contract. We would incur pretty massive penalties – the rule of law still applies here – of approaching £10 million. And they can easily sell that gas for more than we have agreed to pay for it.

“A double benefit when the intended effect of a boycott is a penalty. We concluded the best thing to do is see the contract through and then move on.”

A few days ago, Danish energy giant Ørsted unveiled the reasons it could not put an end to its gas contract with Russia’s Gazprom Export.

Make sure you check out the latest Net Hero Podcast episode:

Latest Podcast