Uniper ramps up Q4 generation as demand, plants return; focus shifts to hydrogen

London — Germany-based power generator Uniper ramped up production in the fourth quarter of 2020 as demand and generation assets at Irsching and Maasvlakte returned to the market, it said March 3.

Generation in Europe and Russia in 2020 fell 14% year on year to 94.6 TWh, but some segments (German gas, Dutch coal) showed growth. Generation in the fourth quarter was 25.6 TWh, according to Uniper's annual report.

"In a difficult market environment, we managed to achieve our 2020 targets and to initiate a profound transformation of Uniper into a sustainable energy company of the future," Uniper CEO Andreas Schierenbeck said.

Within European generation, Swedish nuclear saw the biggest decline in 2020 (falling 5 TWh to 11.5 TWh), while hydro and coal registered slight gains to 13.8 TWh and 13.5 TWh, respectively.

Gas generation fell 4.4 TWh to 15.8 TWh. UK CCGT output was down 2.8 TWh at 10.2 TWh, mainly due to coronavirus-driven demand declines, it said.

Uniper returned 1.4 GW gas-fired capacity at Irsching in Germany to the market for the fourth quarter and commissioned the 1.4 GW Datteln 4 coal plant in May.

Availability at the 1.1 GW Maasvlakte coal plant in Rotterdam also improved.

Long-term hedging helped the company to offset the negative effect of a sharp decline in Nordic power prices in 2020.

Achieved prices for its 21 TWh Nordic generation averaged Eur29/MWh, almost triple the average spot price.

For 2021, it had 90% of its outright Nordic generation (around 24 TWh) hedged at Eur27/MWh.

Hedged prices fell to Eur22/MWh for just 25% of 2023 planned Nordic generation.

Its German hydro portfolio (around 2 TWh) was fully hedged for 2021 at Eur48/MWh.

Overall, 2020 earnings (adjusted EBIT) were up 16% at Eur998 million, also benefitting from a strong gas segment in the global commodities portfolio, it said.

The company, majority-owned by Finland's Fortum, forecasts lower 2021 adjusted EBIT in a range of Eur700 million-Eur950 million despite making a "promising start," according to CFO Sascha Bibert.

UNIPER POWER GENERATION (SELECTED SEGMENTS, TWh)

Source: Uniper FY 2020 presentation (*includes pump storage)

New growth areas hydrogen, renewables

Growth focus is shifting to hydrogen and renewables as Uniper intends to make its power generation business in Europe carbon-neutral by 2035, it said.

It plans to develop 1 GW of solar and onshore wind by 2025 and add another 2 GW by 2030. It plans to enter the Russian wind market, it said.

In hydrogen, Uniper is developing a 30 MW electrolyzer at Bad Lauchstaedt to start in 2024 and has proposed major plans for Maasvlakte (100 MW scalable to 500 MW) and Hamburg-Moorburg (200 MW including thermal storage and hydrogen-fired gas turbine).

The Hamburg project also plans to establish a hydrogen trading platform, it said.

Uniper expects a significant gap between future hydrogen demand and supply from green hydrogen production sites in Germany.

Imports and other forms of decarbonized hydrogen will be required. In this context, Uniper infrastructure and trading expertise may help to meet demand, it said.

Uniper is also advancing a hydrogen project in Sweden (Perstorp) and signed a cooperation agreement with Novatek in Russia.

The company plans to invest Eur2.7 billion between 2021 and 2023 of which around Eur1.5 billion in growth.

Two new gas turbines in Germany (Scholven 3 and Irsching 6) are on track for commissioning next year.