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    Uniper 'a Good Match': Fortum

Summary

The European energy transition is in progress but despatchable energy is still needed.

by: William Powell

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Uniper 'a Good Match': Fortum

Finnish utility Fortum is now back in talks with Uniper over the nature of their future co-operation. The German utility. with its heavy reliance on coal and gas, is not perhaps the obvious choice of partner for a company such as Fortum which has made much of its low-carbon operations.

Fortum sold its gas import and supply business, Gasum, to the Finnish state in 2014. Gasum had once had similar ambitions to Uniper, where transmission projects with Russian export monopoly Gazprom were concerned. That left Fortum in a similar position to E.ON, which sold Uniper to focus on clean energy 'solutions', smart grids and so on.

Fortum told NGW that the energy transition was a gradual process and the customers of both companies would continue to expect reliable and affordable energy supplies, which means at least some nuclear and fossil fuel capacity.

Uniper has the fifth-highest carbon emissions from its power generation in Europe, according to Fortum's website. The specific carbon dioxide emissions from Fortum's generation in the EU was 28 g/kWh, while including also its Russian power production, they were 174 g/kWh. Uniper's were well over 400 g/kWh. Uniper is also financing the Russian-owned Nord Stream 2 line and building LNG import capacity at Wilhelmshaven, of which it has already sold a significant portion in principle to ExxonMobil.

But with the planned departures of Uniper's CEO and CFO, Klaus Schafer and Christopher Delbruck respectively, announced February 5, Fortum said the following day it was committed to working closely with Uniper to find specific areas of co-operation and ways to add value, and that it was delighted by the decisiveness of Uniper chairman Bernhard Reutersberg to move things forward. Fortum said it was "in the interest of everybody that we rapidly advance now to create value for the stakeholders of both companies." 

In a statement to NGW, Fortum said it remained fully committed to its strategy and sustainability targets and was furthermore committed to the energy transition, but "understand that it will not happen overnight. While we are focused on leading the transition to cleaner energy, we also understand that we have to meet the needs of our customers in terms of security of supply and affordability. That is where Uniper comes in.

"The compatibility of Fortum and Uniper lies in our strategic mix of assets -- both clean and secure -- as well as the expertise required to successfully and affordably drive Europe's transition towards a low carbon energy system. Uniper's stated role as the provider of security of supply is an excellent match with Fortum's ambition to accelerate the energy transition with increasing renewable generation and innovative solutions. With the planned European coal phase out, coupled with Germany's 2022 nuclear stop-date,  Uniper's gas-fired generation will have an important role to play in providing security of supply for the increasing share of renewables in the system.

Furthermore, only about 30% of Uniper's capacity is coal-fired. The company has a significant hydro and nuclear portfolio, as does Fortum.