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Uniper, Germany’s Third-Largest Publicly Listed Energy Company Plans Include Hydrogen

By March 10, 2020 6   min read  (1008 words)

March 10, 2020 |

Uniper Deutschland, one of the worlds largest listed energy companies and the largest producer of green gas produced by Uniper (Germany), has announced its intention to make significant investments in its renewable energy business by 2035.

The announcement is part of a fundamental strategic realignment focusing on the development of its green energy portfolio and its long-term strategy.

Uniper will gradually reduce its own portfolio of CO2 emissions. At the same time, the company wants to offer its customers increasingly climate-friendly products and services.

Uniper operates one of the largest and most modern power plants in the world in Germany. The company is in an ideal position to accelerate and shape the energy transition.

Uniper’s unique portfolio makes it possible to be part of the solution to the global challenge. Global energy demand will increase significantly by 2040, “said Uniper CEO Andreas Schierenbeck. At the same time, we must permanently reduce carbon dioxide emissions.

The transition to a climate-friendly company is in full swing. The strategic course has been set to accelerate decarbonization significantly. Uniper will play a leading role in helping its customers reduce their energy supply and demand.

In addition, new investment criteria stipulate that future investments and projects must be entrepreneurial and contribute to achieving the company’s decarbonization goals. Since the transition to an emission-free future also requires the necessary financial resources, more investment is being made in new and attractive business areas.

That starts with the plan Uniper has published for coal-fired power generation. Consequently, it is planned to increase the emission reductions in the European electricity generation segment from 22 million tonnes today to net zero by 2035.

In the coming years, the company plans to significantly increase the production of carbon dioxide (CO2) emissions from its coal-fired power plants. It already produces more than 1.5 million tonnes of CO 2 per year. This is equivalent to the annual emissions of the entire UK electricity generation sector.

Uniper intends to further expand and gradually decarbonise its broadly diversified gas business. Gas will be a key focus of Uniper’s future strategy and play an important role in the company’s long-term growth strategy. The company is pushing the development of gas-based systems in Gelsenkirchen and Scholven, for example.

Uniper is involved in the Nord Stream 2 project and will continue to help secure Europe’s gas and LNG supply. Demand for imports is increasing as Europe’s “gas production” declines in line with rising demand for gas in Asia and North America.

Uniper plans to gradually replace conventional gas for energy production and trading with green gas and green hydrogen. Uniper initiated such projects at an early stage and is one of the world’s largest producers of “green hydrogen,” which results from the conversion of natural gas into hydrogen and hydrogen fuel cells.

The company already installed its first power-to-gas plant in Falkenhagen in 2013, followed by the first in Hamburg in 2015 and will be supplemented by methanisation plants in 2018. Uniper is also running a pilot project to facilitate the conversion of natural gas into hydrogen fuel cells for use in fuel cell vehicles.

Schierenbeck announced that Uniper intends to actively shape the industry and, together with representatives from industry, science, and politics, promote the development of hydrogen as a key topic. A European approach is needed to promote a hydrogen industry that can thrive and remain in Europe. The technology is out there, what’s been missing is profitability and the right regulatory environment.

Uniper achieved adjusted EBIT (earnings before interest, taxes, depreciation, and amortisation) of 1.5 billion euros in the first quarter of 2016, following one billion in 2015 and one million in 2014. Adjusted EBT benefited from higher electricity prices and higher production, which allowed the company’s water and nuclear plants to earn more. The positive contribution came from the increased revenues of nuclear and hydroelectric power plants. Earnings, on the other hand, were primarily burdened by the loss of the positive effects from previous years.

Uniper used derivatives to protect its electricity and gas business from price fluctuations. The year-on-year increase was mainly due to the positive effects of higher electricity prices and lower natural gas prices. Uniper reported adjusted EBT of 1.5 billion euros in the first quarter of 2016. Adjusted operating funds totaled EUR 923 million.

Uniper CFO Sascha Bibert says: “We’re very satisfied with our business performance in 2019, especially with the fourth quarter. We achieved the targets of the forecast we adjusted back in November. Because of this positive performance, we increased the dividend proposal yet again. It also surpasses our target of increasing the dividend payout by an average of 25 percent per year for the period 2016 to 2020. Going forward, reliable dividend payments will remain a hallmark of Uniper. In addition, we anticipate a good earnings performance in the years ahead as well, which will give us more financial flexibility on our road to a climate-friendly energy world.”

Despite this positive development, the dividend proposal increased again. The dividend payout increased by an average of 25 percent per year for the period 2016 to 2020. This is in line with the target forecast already adjusted in November. The target of increasing dividend payments by an average of 25 percent per year over the 2016-2020 period and beyond was also exceeded. Reliable dividend payments will remain a trademark of Uniper in the future.

In addition, the dividend payout is expected to increase by an average of 25 percent per year for the period 2016-2020 and beyond.

Uniper CEO Andreas Schierenbeck says: “Between now and 2040, global energy demand will increase significantly. At the same time, carbon emissions must be permanently reduced and the energy supply become climate-friendlier. Uniper’s unique portfolio enables it to be part of the solution to this global challenge. Our transition to a climate-friendlier company is well underway. We’ve set our strategic course to substantially accelerate decarbonization. Uniper will play a leading role in a climate-friendly power and gas supply and help its customers decarbonize. And because the transition to a zero-emission future also requires the necessary financial resources, we’ll invest more in new, attractive business areas.”

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