Climate Change

72.9m metric tons

Our total carbon emissions in 2016 (including Russia)1   

43.1m metric tons

EU emission allowances we purchased for 2016

2.8m metric tons

Carbon emissions displaced by our hydroelectric stations in Germany (based on Germany’s current energy mix)

1.4m metric tons

Amount by which the annual carbon emissions of Maasvlakte power station will be rendered climate-neutral by co-firing biomass

4%

Our direct carbon emissions from power and heat generation as a percentage of all stationary fuel-combustion emissions in Europe (under the EU Emissions Trading Scheme)

Towards a Successful Energy Transition

In December 2015, representatives of 195 countries signed the Paris Agreement, pledging to limit the increase in global temperature to under 2 degrees Celsius. For the first time, the global community had set a binding climate-protection target. The efforts of governments, the private sector, and civil society must now be coordinated in a responsible manner to propel a steady transition toward a less carbon-intensive global economy. But what does this mean for Uniper? As a business based largely on fossil fuels, how can we help support this ambitious agreement?

Due to the ongoing expansion of renewables, the electricity supply fluctuates and requires stabilizing measures. Uniper is an international energy utility whose portfolio is ideally suited to balance out fluctuations in wind and solar output.  Our coal- and gas-fired power plants contribute to a stable energy supply. Furthermore, our hydroelectric stations in Germany and Sweden provide a reliable and affordable supply of emission-free energy. In Sweden we operate nuclear power plants that also contribute to securing the baseload power supply and climate protection.

As a global energy trader and service provider, we can promote the use of natural gas – the fossil fuel with the lowest carbon content2 – by helping our customers develop a more balanced energy mix with a decreasing carbon footprint. We also support other energy companies in their decarbonization efforts. For example, our engineering services help operators of wind and solar farms connect their assets to the grid and increase the assets’ energy yield and efficiency. Wind Service

Our storage solutions can be another important aspect of a successful transition to a low-carbon future. Our pumped-storage hydroelectric stations have been operating for decades. We also develop innovative storage technologies such as power-to-gas (in which power is transformed into hydrogen or methane) and power-to-power (in which power is stored in large batteries). Our technologies help better integrate renewables into the energy system. For example, they can store surplus wind power and feed it back into the grid when needed. They also make it possible for solar power generated during the day to be used at night. At the 2016 United Nations Climate Change Conference in Marrakesh, Morocco, we gave a presentation on the M5BAT, a utility-scale battery we developed in collaboration with other partners. The M5BAT had previously received an award for climate protection at KlimaExpo.NRW, a climate-protection initiative launched by the North Rhine-Westphalia state government.

In addition, the increased use of clean-burning natural gas for space heating is an affordable form of climate protection because the carbon-avoidance costs are relatively low.

For Uniper, climate change is an opportunity as well as a challenge. We therefore factor it into our business decisions and are working to integrate it within different units, such as Asset Management, Operations and Sales. This enables us to take a structured approach to this issue.

Klaus Schäfer, CEO

Evaluating the risks and impacts

Climate policy and regulatory environment

At Uniper, we want to support the energy transition. It’s important for us to have a better understanding of the climate-related risks and opportunities we face and of the negative impacts we need to minimize. As an energy supplier with businesses in many different areas and regions we’re affected by climate-protection policies. They have a direct impact on our coal, gas, and hydro generation. They increase competition with our peers and reduce our growth opportunities in some countries, particularly those where our European Generation segment operates. Some of these countries are considering policies aimed at phasing out specific technologies or fossil fuels. We monitor these policy debates closely and strive for a responsible dialog with governments. We’d also like to emphasize that precipitous action could have negative consequences for  society: it could, for example, make the energy supply less reliable and increase energy costs.

The example of Germany illustrates the complexity of the policymaking environment. Germany intends to end domestic coal mining in 2018 and to phase out nuclear energy in 2022. Its subsidy policies continue to drive renewables growth. These trends need to be adequately balanced by mechanisms that support a fair transition. In the near term, Germany therefore needs a stable and unambiguous policy that gives companies business prospects and fosters investments in new infrastructure and better technologies. Similarly, many unabated coal-fired power plants will be shut down in the United Kingdom in response to EU and national environmental legislation. The Netherlands has already negotiated closures of some coal-fired plants as part of the political energy agreement of 2013. Particularly in this environment, we can support the energy transition by contributing to supply security.

EU ETS Emissions

 

 

11.2 GW of our European generation fleet’s total capacity is fairly carbon-intensive (hard coal, lignite, oil).

 

 

 

16 GW, however, consists of power plants with little or no carbon emissions (gas, hydro, nuclear).

 

 

 

The direct carbon emissions from our fossil-fueled power and heat generation accounted for around 4 percent of all stationary fuel-combustion emissions in Europe (stationary power plants and industrial plants) covered by the EU Emissions Trading Scheme (EU ETS). Our carbon footprint was determined in accordance with the EU ETS and the Greenhouse Gas Protocol. 

Our position on EU-ETS

We participate in the climate policy debate and talk with other companies, industry associations, and further stakeholders about how to improve the climate policy and regulatory environment. We believe that the EU ETS is currently the most cost-effective market-based mechanism for helping Europe meet its emission-reduction targets. A properly functioning trading scheme should affect carbon prices in a way that stimulates investment in climate-friendly technology. We’re convinced that a carbon trading system with imposed caps can achieve this more efficiently than tax mechanisms. However, carbon prices are currently too low for the EU ETS to send any signals to the market. We will therefore continue to advocate the reinvigoration of the EU ETS.

In recent years, our carbon emissions have declined significantly as a consequence of the decommissioning of some of our coal-fired power plants in Europe. In 2016 our overall EU ETS carbon emissions from our generation assets didn’t decrease significantly owing mainly to the entry into service of Maasvlakte 3, our new plant in the Netherlands, which has an installed capacity of 1 GW. Its greater efficiency will reduce our carbon emissions per kWh significantly in comparison with its predecessor plants.

EU ETS Emissions of the Uniper Group (excluding Russia)

 

Metric tons

Percent

free

auctioned

total

auctioned

free

Germany

472,483

17,884,440

18,356,923

97.4

2.6

France

4,249,143

4,249,143

100

Netherlands

301,614

10,931,244

11,232,858

97.3

2.7

United Kingdom

8,406,612

8,406,612

100

Hungary

560,268

560,268

100

Sweden

104,860

123,992

228,852

54.2

45.8

Figures do not include our plants in the Czech Republic as they are not fully consolidated. However, as they are managed by Uniper in the EU ETS, they are included in the overall EU-ETS figures (43.1m metric tons).
Figures do not include 2,057 auctioned metric tons related to our power plants in Belgium (power plants in Langerlo sold in January 2016).

In total, our power plants in Europe and Russia emitted 72.7 million metric tons of carbon dioxide in 2016 (Scope 1).1 

72.7m metric tons CO2e

Direct (Scope 1) carbon emissions in 2016 (including Russia)1 

0.2m metric tons CO2e

Indirect (Scope 2, location-based method) carbon emissions in 2016 (including Russia)1 

EU ETS and non-EU ETS Emissions


With own production of 138.7 TWh and the allocation of all the carbon-intensive assets to Uniper, including those in Russia, our overall carbon intensity stood at 524g/kWh.3 No reduction targets were defined in 2016.

Weather-related risks

Furthermore, we must understand the negative effects of climate change and related physical risks that may have a direct impact on people as well as our assets. Computer modeling shows that the side effects of climate change – extreme weather, rising sea levels, and water scarcity – will be felt even in heavily populated regions of the world such as Central Europe and Great Britain. They will effect especially power stations and other industrial facilities located on the coast or next to large rivers. Over time, our operations could be adversely affected by other climate-induced phenomena, such as soil erosion, an increase in air pressure, or higher humidity. Climate change also increases the risk that our assets could be damaged by strong winds and severe storms or rendered inoperable by drought.

Our hydro fleet management already addresses physical risks arising from extreme weather conditions (such as floods). Our activities along bigger rivers often involve measures to build dams and strengthen river banks.

Centralized emissions governance

We’re currently deepening our internal evaluation of the potential implications of climate change for our portfolio and working toward a better understanding of the climate impacts of our operations. Our Competency Center for Carbon plays an important role in our efforts. It conducts centralized emissions governance and compiles emissions data for our entire company. It also supports our country-level units in complying with the regulatory requirements of the EU ETS.

At the end of 2016 we integrated the Competency Center for Carbon’s activities more closely with our other departments and processes. Above all, we established a closer interface with our Sustainability team in order to raise awareness of climate risks and opportunities across the company. Our Chief Sustainability Officer oversees this process, which includes internal carbon-related audits of our facilities. The Competency Center works with other business departments as well, for example supporting our Sales team in developing new climate-friendly products.

Conventional plants

Our Asset Improvement team is conducting numerous modernization projects to make our generating units more efficient, in particular by enabling them to ramp up and down faster. This reduces fuel consumption, costs, and carbon emissions. We’re implementing these measures primarily at our already highly efficient combined cycle gas turbines, because they can achieve the highest levels of fuel efficiency. Gas-fired power plants, which emit only about half as much carbon as coal-fired plants, account for more than one-third of our installed capacity (excluding Russia). With an average fuel efficiency of just under 50% and comparatively low carbon emissions per kWh, our European gas-fired fleet helps reduce our carbon intensity. Gas demand is forecast to increase by 50% between now and 2040. We therefore intend to do even more to realize the potential of natural gas as a viablesupplement for renewables in tomorrow’s energy world.

Also Datteln 4, our new coal-fired power plant in west-central Germany, also sets industry standards for efficiency and climate protection. Scheduled to enter service in 2018 after a number ofcontroversial issues are resolved, it will emit about 100 grams less carbon per kWh than the German average.

We’re also allocating some generating units to co-fire biomass (such as wood pellets or sewage sludge). This involves modifications to the combustion process and to fuel offloading and storage facilities. Our life cycle analyses indicate that co-firing can reduce a unit’s carbon intensity significantly because the emissions from biomass combustion are climate-neutral. Maasvlakte 3, for example, is designed to co-fire up to 15% biomass. This enables it to displace up to 1.4 million metric tons of carbon emissions annually.

In Sweden, nuclear power meets about half of the country’s power demand and contributes to its small carbon footprint. Uniper is the majority owner of Oskarshamn nuclear power plant (NPP) and a minority owner of the Ringhals and Forsmark NPPs. We also own Barsebäck, Sweden’s first commercial NPP, which has been decommissioned and is currently being dismantled. High priorities of our nuclear power business are responsibility and safety.

Hydroelectricity: an established and efficient renewable

Hydropower is the oldest renewable technology. It’s clean, flexible, and reliable. Hydro accounts for about 10% of our total generating capacity and 13% in Europe. Our 108 hydro plants in Germany meet the energy needs of 1.6 million households and each year prevent the emission of 2.8 million metric tons of carbon based on the country’s current energy mix. Our 69 hydro plants in Sweden help it have one of the smallest carbon footprints of any industrial country.4

Our hydro fleet includes pumped-storage hydro plants, which use surplus electricity to pump water to be stored in a reservoir at a higher elevation. When energy is needed, the water is released to drive turbines that produce electricity. About 70 to 80% of the energy used to pump the water higher is recaptured when it falls. Consequently, these plants play a key role in maintaining grid stability and can efficientlystore surplus power from conventional or renewable sources for later use.

2.8m metric tons

Carbon emissions displaced annually by our hydroelectric stations in Germany

Storing renewable energy as gas

We’re convinced that power-to-gas (P2G) is another crucial technology in the transition to a low-carbon future. P2G uses surplus renewable electricity to power electrolysis equipment that transforms water into hydrogen. Europe consumes about 80 billion cubic meters of hydrogen each year. Industrial hydrogen production is typically fueled by natural gas, which results in carbon emissions. Not so with wind-powered hydrogen production. This makes P2G hydrogen a climate-friendly energy source with many applications, including power generation, transport, and industrial use. Green hydrogen can also be used in tandem with natural gas. Germany’s gas infrastructure provides opportunities for storing hydrogen. But for technical reasons, only limited quantities of hydrogen can be fed into the natural gas pipeline system. Combining green hydrogen with CO2 to produce climate-neutral methane, also known as synthetic natural gas, offers greater potential. While this procedure is still relatively expensive, methane could be stored in the natural gas system and in underground gas-storage facilities without limitation.

We were one of the first companies in the world to operate a P2G demonstration unit. The three-year trial was conducted in Falkenhagen in northeast Germany. The unit used electrolysis to transform surplus electricity from numerous nearby wind turbines into hydrogen. During the trial, several million kWh of wind gas was fed into the natural gas pipeline system. The trial showed that renewable energy could be stored efficiently as gas, thereby decoupling energy production from energy consumption. The technology works well. It responds reliably to the sharp fluctuations in wind conditions, is market-ready, and promises to become even more efficient and affordable.

P2G’s solid performance encouraged us to go a step further by adding additional equipment that enables the unit in Falkenhagen to produce methane. In theory, the quantity of methane that could be fed into the natural gas pipeline system is unlimited. This means that large quantities of wind energy could be transformed into methane for later use, which would have a positive impact on the earth’s climate. The heating sector in Germany, for example, is responsible for 26% of country’s total annual GHG emissions (2016). Using wind gas for heating can be a promising climate-friendly alternative to natural gas. The P2G methane trial at Falkenhagen is part of a European research consortium called STORE&GO, which will run through 2020.

We’re also partnering with companies such as BP to produce P2G biofuels. Unlike biofuels made from agricultural products, however, P2G hydrogen isn’t yet classified as a biofuel in Europe. This means that its potential to promote low-carbon mobility will depend on the future policy and regulatory environment.

Alongside P2G, we continue to refine power-to-power technology such as utility-scale batteries for on-site storage of surplus electricity at wind or solar farms. In partnership with RWTH Aachen University and several equipment manufacturers, in September 2016 we began test operations of the M5BAT, a utility-scale storage system consisting of different types of batteries.

Sharing our expertise, expanding our partnerships

We work continually to adjust our business model and to expand into new areas. For example, we provide engineering and business consulting services to other asset operators. Before the spinoff from E.ON, we gathered comprehensive experience in operating offshore and onshore wind farms. We therefore know how to reduce the costs of such assets. Our skills in the development of wind power plants and our own software modeling in particular help provide clean energy at a reasonable cost. Furthermore, we know the suppliers of onshore and offshore technologies and understand the processes, from planning and network connections to decommissioning and dismantling. In doing so, we can also help reduce the related costs for the entire asset life cycle for conventional power plants as well.

As an independent consultant, we provide customers with innovative solutions for energy management and for embedded power and heat generation. The potential for improving the energy and cost efficiency of industrial and commercial customers is substantial, just as it is in the public sector. We see our future as a long-term partner for energy management, sustainable energy procurement and climate-friendly technologies and are involved in numerous cooperative arrangements. We partner with:

  • IBC Solar to market solar and energy-storage solutions to municipal and regional utilities
  • EASYCHARGE.me to provide comprehensive software and hardware solutions for electric-vehicle charging infrastructures
  • RentaLite to offer complete LED lighting solutions under leasing arrangements with lower up-front costs 
  • FutureCamp Climate to build expertise in reducing the carbon emissions of energy suppliers, industrial enterprise, retailers, and the public sector
  • GreenCitySolutions in a project called City Trees to develop wall coverings made from moss that can filter particulate matter, which is bad for humans and the earth’s climate

1The figure includes direct emissions (Scope 1) from power and heat generation and other direct emissions. It also includes indirect emissions (Scope 2) from purchased electricity, heat and cooling. The Scope 1 and Scope 2 figures include emissions from consolidated and nonconsolidated generation assets over which Uniper has operational control. We map the sources of emissions of climatically harmful gases (such as CO2, CH4, N2O, HFCs, PFCs, SF6, NF3) according to the requirements of the Greenhouse Gas Protocol.
2IEA FAQ (2016).
3In the 2015 E.ON Sustainability Report, the carbon intensity (Group level) was 350 g/KWh.
4Includes consolidated assets only.

Assured Content

Selected figures were independently audited and are identified by the “audited” check symbol   .
Qualitative content related to the Management Approach was also part of the assurance.

Download the Assurance Statement here