Fortum Relaxed about Uniper's Green Drive
Finnish state utility Fortum has welcomed Uniper’s strategy update, saying it "provides a good starting point for the strategy alignment and development of a joint vision for Fortum and Uniper." But it said its Russian business, where Uniper has five plants totalling 11 GW of coal, lignite and gas power generating capacity, needed to do more work on decarbonising. Fortum expects to take control of the German energy company in a matter of weeks.
“Upon becoming the majority owner of Uniper, Fortum looks forward to a close collaboration in developing a joint vision and strategic alignment between the companies and their employees, including concrete plans to meet Uniper’s stated emission reduction targets,” said Fortum CEO Pekka Lundmark.
“Uniper’s strategy is a clear step in the right direction and underlines the strategic rationale of Fortum’s investment in Uniper. We are especially pleased about Uniper’s commitment to develop a clean energy portfolio,” said Lundmark.
Fortum said it welcomed Uniper’s carbon neutrality target for its European generation by 2035 and also its plan to exit coal and commit to develop clean gas solutions. Fortum’s own European generation is already 96% carbon free, although it does have coal as well.
Fortum said it shares Uniper’s view on the importance of natural gas as an enabler for coal closures and thereby emission reductions while maintaining security of supply. Gas also enables more investments in wind and solar power. Clean gas, for example through hydrogen, will be needed in the future carbon neutral society.
Fortum notes that Uniper’s carbon neutrality target for year 2035 does not include the company’s Russian operations, where it trades as Unipro. As the largest renewable energy investor in Russia, Fortum said it "would like to continue to discuss with Uniper and Russian authorities on how the companies’ operations and Russia’s energy policy should develop to meet the objectives of the Paris agreement." Russia is heavily reliant on fossil fuels, a situation that Fortum expects to continue for years to come.
Unipro's biggest plant there is the 5.7-GW gas fired Surgut plant; the second biggest is the 2.4-GW lignite plant at Berezovsky; the other plants can run on either coal or gas.
In the execution of the strategy, Fortum said it was also very important to mind the impact on both Fortum and Uniper’s credit rating. Fortum’s key objective is to have a solid investment-grade rating of at least BBB.