Uniper plans €8bn green transformation as earnings rebound

Things are looking up for nationalised energy company Uniper, after reports of strong first-half numbers and an announcement of ambitious green transformation plans.

With adjusted EBIT of €3.701 million ($4.07 million), Uniper posted what it refers to as "exceptionally good earnings" in the first half of 2023.

Its adjusted EBIT in the prior-year period of 2022 was -€757 million (-$832 million), which amounts to a nearly €4.5 billion ($4.9 billion) earnings increase.

The company credits this to strong operating performance in a favorable market environment as well as benefits from hedging transactions for fossil-fueled power generation and its midstream gas business.

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Uniper CEO Michael Lewis commented in a statement: “We were financially stabilized by the German Federal Government just under eight months ago, and only a short time afterward we achieved the turnaround. We’ve significantly diversified our gas procurement. Our supply obligations to municipal utilities and industrial customers for 2023 and 2024—which we entered into before the Russian supply disruption—are almost fully hedged by forward transactions.

"Our successful stabilization and financial recovery have again given us latitude for new growth and corporate transformation...We also want to become greener faster so that we can offer our customers bespoke energy solutions for their own transformation.”

Now supported by a fully staffed management board, Uniper is planning an ambitious green transformation.

The company plans to invest more than €8 billion ($8.8 billion) through 2030 for its green transformation, triple its average annual investments of the past three years.

As part of this transformation plan, Uniper plans to:

• Adapt its own power plants and assets and invest in flexible power-generating units.
• Increase investments in solar and wind farms
• Ensure 80% of its installed generating capacity is zero-carbon by 2030
• End coal-fired power generation by 2029
• Ensure scope 1 to 3 emissions are carbon-neutral by 2040, ten years earlier than previously planned
• Achieve group-wide carbon neutrality for its Scope 1 and 2 emissions by 2035

Uniper also intends to increase the use of green gases such as hydrogen, in an effort to decarbonise its gas business. To this end, the company aims for 5% to 10% of its portfolio to consist of green gases by 2030.

Lewis stressed the important role of Uniper in supplying a balanced power supply, offering flexibility with gas to support intermittent renewables.

"We have green power, but also flexible, dispatchable power. You can’t have one without the other if you want security of supply. That’s why Uniper will expand both. Industry will continue to need an uninterrupted supply of gas, but with an increasing proportion of green gas. Our power and gas portfolio already makes us very well prepared for a future in which the two sectors will increasingly be integrated,” said Lewis.

The German government, which is required under EU state-aid rules to reduce its stake in Uniper to 25% by 2028, is reportedly expected to begin planning for a company exit by the end of 2023.