Anyone who has known the Düsseldorf-based company Uniper for a long time will be rubbing their eyes in amazement these days: the previously leading protagonist of reverse energy supply suddenly wants to turn dark green. So far, the group, which split off from the energy giant Eon in 2016, was primarily known as a fossil lover. The managers bought gas primarily in Russia and operated coal, gas and oil-fired power plants. This enabled them to live in the lap of luxury until 2021. Even more: Uniper became systemically important for Germany through the gas business.
Now the management is planning a small revolution: by 2030, it wants to spend eight billion euros and convert the business to renewable energies. The speed of the conversion, which the new CEO Michael “Mike” Lewis, a Brit, is setting, surprises even those who know the market. After all, just a few months ago Uniper was – figuratively speaking – in the intensive care unit.
A loss of around 19 billion euros was accumulated in 2022. The reason: The company had signed contracts with around 1,000 municipal utilities and industrial companies in order to be able to supply them with inexpensive gas over the long term. When Russia’s head of state, Vladimir Putin, turned off the gas tap after the attack on Ukraine, world market prices for the fuel exploded tenfold in some cases. Uniper suddenly had to procure the gas somewhere, sometimes at insane costs, in order to meet its contractual obligations. That almost cost the company its head. In order to prevent bankruptcy, the state took over almost 100 percent of Uniper’s shares; around 13.5 billion euros in rescue tax money have flowed to the Rhine since then.
Last week, Lewis surprised with another message: Uniper is making solid profits again. Around 3.7 billion euros jumped out in the first half of this year. The big plus came about because the import price for gas on the world market collapsed again much faster than expected. In 2022, Uniper sometimes paid more than 30 cents per kilowatt hour, but the costs are now around 2.9 cents. Consumers, on the other hand, hardly benefit from the fall in prices. To the delight of the finance departments of all energy suppliers, they must continue to pay comparatively very high kilowatt prices; in the current year the average is 18 cents. In addition, under the impression of the market easing, Uniper has now reversed significant provisions that had been formed after the Russian gas supplies were disrupted.
In the electricity business, too, Uniper apparently earns a decent amount of money. Here, too, procurement costs collapsed again after a drastic price increase. But here, too, the burden on consumers remains high. The electricity providers continue to charge them hefty tariffs on average. The bottom line is that the federal government is curbing electricity costs with the electricity price brake, which is little more than apparent relief, because after all, state-owned tax money flows into the coffers of the corporations, including Uniper.
Uniper’s change from environmental Saul to environmental Paul should be extensive, Lewis believes. More than 80 percent of power plants should produce CO2-free by 2030. Step by step, around six gigawatts of coal-fired power plants will be taken off the grid, and by 2029 coal-fired power generation is to come to an end. The large coal-fired power plant Datteln 4 is being sold due to EU requirements. And the gas-fired power plants are to be converted so that they can gradually run on green gas, especially with climate-friendly hydrogen.
According to the boss, Uniper wants to be completely climate-neutral by 2040 – the year 2050 was previously the target. Lewis therefore wants to invest heavily in solar and wind power. And the group’s gas storage facilities are said to increasingly store hydrogen. The prospects are apparently good: For this year, Uniper is expecting adjusted net profit “in the mid-single-digit billion range”.
Lewis has recently been using the German word “Energiewende” remarkably often in his lectures, which are held in English. That shouldn’t be a coincidence. Without a doubt, his corporate strategy also bears the signature of the federal government, especially that of the Federal Minister for Economic Affairs, Robert Habeck. Stock exchange and environmental experts doubt whether Uniper would go the green way so consistently if the 99 percent shareholder were not called UBG Uniper Beteiligungsholding GmbH – the name of the federal investment company. On the other hand, the other energy giants, such as RWE, have also announced and initiated ecological restructuring. Without such an environmental protection story, it would be almost impossible to attract international investors or achieve stock market success. The Uniper share price, which plummeted dramatically in spring 2022, has since recovered somewhat.
The Düsseldorf company management is now examining whether it can already repay part of the state aid from the surprising profit. For many experts, this does not go far enough. Why check? They are obliged to do so, the taxpayers have a right to it! In any case, the federal government is relieved that a way out of a dilemma is in the offing. Because she has to get rid of Uniper again. According to EU regulations, the state may only hold a maximum of 25 percent plus one share in the group by 2028.
