Uniper and Fortum intensify cooperation to better address business performance, growth and sustainability
Despite the restrictions imposed by the Corona crisis, Uniper remains fully on course and poised to emerge from this crisis stronger than before, further developing its business strategy that considers the evolution of its original fossil-fuel intensive power generation portfolio towards low- or no-carbon emitting assets.
The Uniper journey is taking the company away from coal, expanding gas as the fastest way to significantly reduce CO2 and developing hydrogen and renewables for the future.
To make net zero possible, Uniper is developing technologies to decarbonize its gas fleet, including partnerships with equipment manufacturers like Siemens and General Electric. A clear focus is also on securing the supply of more and better energy products to transmission system operators, including grid stability services. Our plans also consider more trading of emissions-less commodities and the expansion of industrial services tailored to support customers in reducing their carbon footprints.
Uniper is also seizing the additional opportunities of collaboration with its majority shareholder Fortum. These opportunities come in the form of growth and optimization developments that create value for both companies, their employees, customers and shareholders. This cooperation contributes to the Fortum group strategy definition while supporting Uniper in accelerating the implementation of its own business strategy, assisted by the willingness to empower energy evolution that motivates everyone in the company.
Fortum is supportive of the new Uniper strategy as presented last March, and with the working teams of Fortum and Uniper now in place we will be able to better align the already identified business potentials to address the future development of both companies towards carbon neutrality. These initiatives will be further evaluated by Fortum and Uniper within each company’s governance, ensuring that any final decision on concrete measures is in the best interests of the respective company and all their stakeholders. Uniper’s co-determination bodies are involved, and we will need the strengths of everyone in both Uniper and Fortum to be successful in addressing the energy market of the future.
Uniper is also seizing the additional opportunities of collaboration with its majority shareholder Fortum. These opportunities come in the form of growth and optimization developments that create value for both companies, their employees, customers and shareholders.
Sustainability targets
Last spring, we announced a plan to make the Uniper power-generation fleet in Europe carbon neutral by 2035. Today we can – again for the European power-generation – already confirm a greater than 50% reduction of our current CO2 emissions by 2030, which is enabled by the implementation of our proactive 7GW coal-exit plan and several other important measures.
We also confirm the following additional sustainability targets and measures:
- Definition of a Scope 3 target for the Uniper global commodities business in 2021
- Aim to build a renewable portfolio in the Russian Uniper business
- Implementation of the TCFD framework, reporting in accordance to sustainable finance guidelines
To conclude, we can also confirm the whole of Uniper aims to be carbon-neutral by 2050, which is a common objective of both Fortum and Uniper and a contribution to meet the Paris Agreement targets.
Growth potential
Joint working teams from Uniper and Fortum will explore growth opportunities of both companies in the areas of hydrogen and renewable energies. The aim is to apply the “one team approach” principle, with one of the companies being in the lead. In these two areas, the aim is that Uniper takes the lead.
Renewables
Uniper’s asset base in Germany, UK and the Netherlands offers a strong development platform at its own sites and advanced opportunities in non-organic growth. These can be successfully combined with Fortum’s strong expertise and development pipeline.
For Uniper, this is an opportunity to establish a concrete plan to develop 1GW of solar and wind power generation until 2025 and 3 GW in the following years. Adding the amount Fortum aims to establish on its own, we will be talking about a total of 1,5 to 2,0 GW of new capacity for the two companies by 2025 already.
Building up our own renewable power generation capabilities is the cornerstone of success in the new green hydrogen global sector, which is expected to worth over €10tn per year by 2050. When supported by Fortum’s experience in wind and solar development, we can have a faster journey in building up a position in the renewable energies sector.
For Uniper, this is an opportunity to establish a concrete plan to develop 1GW of solar and wind power generation until 2025 and 3 GW in the following years. Adding the amount Fortum aims to establish on its own, we will be talking about a total of 1,5 to 2,0 GW of new capacity for the two companies by 2025 already.
Hydrogen
The cooperation between Uniper and Fortum on hydrogen is planned to build on Uniper’s strong know-how. Uniper is one of the pioneers in this field and sees hydrogen not only as an energy carrier but also as a platform of possibilities to effectively pursue the goal of climate neutrality for most industries, including chemicals, steel-making, heating, freight, shipping and the production of aviation fuel.
Uniper's presence at all stages of the hydrogen value chain and having more than ten projects in the business development pipeline, combined with Fortum’s strong presence in the Nordic countries, gives both companies the opportunity to actively shape the hydrogen market in a very strong way.
One concrete example of this type of cooperation is the project for producing sustainable methanol with renewable hydrogen to support the chemicals company Perstorp to significantly reduce their carbon emissions in Sweden. This is a true partnership project between Uniper and Fortum.
Optimization opportunities
Both Uniper and Fortum hold sizeable hydro operations and physical trading operations in the Nordic countries, which offer value creation potential through collaboration.
Specifically, potential is identified in mid-term and short-term hydro-power optimization and Nordic physical trading operations, operations and maintenance of the power plants, risk management and investment prioritization, procurement activities, execution of refurbishment projects, safety and environment and hydro interest promotion in Sweden.
The aim here is for the “One Team Approach” principle to be applied in the case of the Nordic hydro and physical trading optimization, with team leadership lying with Fortum.
Importantly, financial trading and hedging is excluded from the joint approach, and asset ownership remains unchanged. Investment decisions have to be approved by the respective asset owner in accordance with each company’s governance.
Benefit potential
To conclude, Uniper is expected to achieve benefits from the cooperation with Fortum in several areas: the Nordic hydro operations and Nordic physical trading operations described above; nuclear operations, including maintenance, engineering and procurement; cooperation in nuclear decommissioning and thermal, and other services both for own power plants and for external customers; economies of scale through IT and indirect procurement.
In total, by managing these areas in collaboration, cash-effective impacts on a consolidated group basis are expected to ramp up to about €50m per year during the first three years, and can achieve around €100m per year in 2025.
It is important to mention that all business cooperation between Fortum and Uniper will need to be further evaluated within each company’s governance, ensuring that it is in the best interests of each respective company.
Uniper is poised to succeed in its journey to empower energy evolution.
