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Uniper Seeks to Profit From Gaps in Germany’s Energy Shift

Uniper Seeks to Profit From Gaps in Germany’s Energy Shift

(Bloomberg) -- Once seen as a fossil-fuel dinosaur, Uniper SE has a strategy for how to thrive in Europe’s shift to green energy.

While the plan still involves burning hydrocarbons, it’s natural gas, the cleaner cousin of coal, that could drive profits in the future. Chief Executive Officer Andreas Schierenbeck said Uniper’s network of pipelines, storage sites and its trading division puts it ahead of peers EON SE and RWE AG as Germany increasingly relies on intermittent wind and solar.

“Gas is exactly the bridge technology that’s needed,” Schierenbeck said in an interview at Bloomberg’s Frankfurt office. “We’re much better positioned for that than the other players.”

Established in 2016 as a spin off of EON’s gas and coal operations, Uniper has had to answer questions from investors on whether it has a future as Germany seeks the closure of a large chunk of its power plants. The nation’s plan to slash emission relies on pulling coal out of the power generation market by 2038. That will force Uniper to close seven plants burning the fuel.

Uniper Seeks to Profit From Gaps in Germany’s Energy Shift

Schierenbeck said Germany’s decision to quit coal, as well as nuclear by 2022, could boost the economics of burning gas to make electricity. Those gas plants may have a bigger role in the energy system. Uniper also is building skills on converting coal plants into gas-fired stations, which will also it to use its existing assets for longer.

One such project includes the conversion of the Scholven plant in Gelsenkirchen. Under that program, units that burn hard coal at the facility, with a combined generation capacity around 800 megawatts, will start using gas by 2022. Those gas-fired units could also eventually be powered by green hydrogen.

“I think they’ll be the next big thing for us,” he said.

Uniper Seeks to Profit From Gaps in Germany’s Energy Shift

Uniper has one plant, the 1,100-megawatt Datteln-4 facility in North Rhine-Westphalia, that has yet to connect to the grid after cracks were discovered. Negotiations are ongoing over whether it will start next year.

“There is understanding from the government that it makes sense to turn on the most efficient plant,” Schierenbeck said, adding that he doesn’t expect the case to go to court.

Uniper Seeks to Profit From Gaps in Germany’s Energy Shift

Hydrogen

Uniper and several of its peers are racing to develop emissions-free ways of producing hydrogen. The technology is now seen as an important option to fill the energy gap left from exits from coal and nuclear.

The fuel is also suitable as a replacement for natural gas and could be used in Uniper’s existing gas-fired plants.

“We need to make gas green as natural gas will be the next coal discussion,” Schierenbeck said. “If you find a solution, you can easily scale it.”

Uniper Seeks to Profit From Gaps in Germany’s Energy Shift

To contact the reporters on this story: William Wilkes in Frankfurt at wwilkes1@bloomberg.net;Vanessa Dezem in Frankfurt at vdezem@bloomberg.net;Will Kennedy in London at wkennedy3@bloomberg.net

To contact the editors responsible for this story: Reed Landberg at landberg@bloomberg.net, Lars Paulsson

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