Secure and Reliable Energy Supply

36.4 GW

Uniper generating capacity helps ensure a reliable energy supply in seven countries1

82.2%

Average asset availability of our conventional generation fleet

~50%

Proportion of system-relevant capacity in Germany operated by Uniper1

8.2bn cubic meters

Gas storage capacity

Keeping the energy supply secure and reliable

Most people take electricity for granted. We can watch television, listen to music, or run the dishwasher whenever we like: 24/7, 365 days a year. But the energy market, particularly in Western Europe, is experiencing dynamic change. This change is driven primarily by energy policies.

Europe’s energy transition is under way. Renewable energy is increasingly prevalent in several countries. Most is wind and solar. But the growth of renewables presents the energy system with numerous challenges as well as opportunities.

We defined long-term commitments for the topic of secure and reliable energy supply:

  • Foster established and new flexible generation solutions to enable a secure transition toward renewables worldwide.
  • Enter new markets in developing and emerging countries responsibly, supporting their rapid industrialization.

These commitments support SDG 7, 9 and 12:

The material topic secure and reliable energy supply encompasses four subtopics: power supply, storage availability and solutions, gas purchase and supply, and business adaption and resilience.

Power supply

Our power plants are flexible, efficient, and in the right place to balance out the volatile output from renewables. Renewables alone can’t ensure a reliable energy supply. Periods of cloudy, windless weather can lead to interruptions in the power supply, especially when energy demand is high. That’s when our flexible power plants and energy-storage facilities step in.

This means that we make a substantial contribution toward security of supply. We also generate power 24/7 to meet demand continuously. Gas-fired power plants are fuel-efficient and can adjust their output within a few minutes, enabling them to balance out the fluctuations in renewables production and ensure grid stability. They also have relatively low carbon emissions. That’s why gas will play a pivotal role in the energy system of the future. Around 50% of our installed capacity runs on natural gas.

Uniper’s key performance indicator for supply reliability is the average asset availability of its conventional generation portfolio. In Europe and Russia, it was 82.2% in 2017, slightly lower than in 2016 (82.8%). The reduction is due to increased planned unavailability to conduct maintenance that will help to keep our assets reliable in the future. We reduced our unplanned unavailability from 9.2% in 2016 to 7.9% in 2017.

Periodic technical upgrades to our assets are crucial for ensuring high rates of availability and efficiency and for preventing unplanned downtime. Most power outages are the result of severe weather or faults in the transmission grid. Essential public services depend on our power and gas supply. That’s why, along with safety, preventing supply interruptions is our top priority.

Our new coal-fired power plants, such as Maasvlakte 3 in the Netherlands and Datteln 4 in Germany, set industry standards for efficiency and environmental performance of coal fired power plants. They can ramp up and down swiftly in response to fluctuations in renewables production.

Reserve power plants in Germany

There isn’t enough transmission capacity to transport surplus wind power produced in northern Germany to other parts of the country. In southern Germany, the number of times that reserve plants have had to come online to cover the high energy demand has increased. This situation isn’t expected to change, since grid expansion currently can’t keep pace with the growth of renewables capacity. In short, our reserve power plants will remain crucial for ensuring a stable power supply.

No other energy company has more system-relevant power plants in Germany than Uniper. With Germany to decommission 8 GW of nuclear capacity by 2022, our generating capacity will become even more important to the country’s supply security. And our power plants don’t just produce electricity. They also generate process steam, compressed air, and heat for industrial enterprises and thousands of households. In the years ahead, we will expand these services in order to make our business more independent from changes in wholesale markets.

Responsible asset management

Being one of Europe’s leading energy producers means we contribute significantly to ensuring a reliable energy supply. We continually improve and refine all the processes necessary for this purpose to ensure that we operate our assets as cost-effectively and reliably as possible, without compromising on our safety, health, and environmental performance. The principles of this approach are laid down in our Physical Asset Policy and are to be complied with throughout an asset’s life cycle, from planning to dismantling.

To manage the operating risks of our generation assets, we have an integrated asset and HSSE management system that conforms with industry practice and has been in place since 2016. We can only ensure the implementation of the principles of our Physical Asset Policy if everyone at our company plays their part. We have therefore defined responsibilities, processes, and guidelines for issues such as occupational safety, business continuity, and crisis management. Our Chief Operating Officer (COO) is responsible for the effective integration of these essential elements of asset management.

Storage availability and solutions

For the energy transition to succeed, Europe not only needs flexible generating capacity, it also needs other ways to keep the energy supply secure. One way is to store surplus renewable electricity. Electricity can be stored in many ways, from established pumped-storage hydroelectric (PSH) stations to promising new possibilities, such as battery systems and power-to-gas.

PSH stations

Our hydro fleet includes PSH stations, which use surplus electricity to pump water to 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. Because of their short response time, PSH stations can balance out load fluctuations and regulate grid voltage and frequency. They therefore play a crucial role in ensuring grid stability and in jump-starting the grid after a widespread outage. They currently represent the only technology capable of efficiently storing large amounts of energy for an extended period.

98.1%

Availability of our hydropower plants in Germany2

98%

Availability of our hydropower plants in Sweden2

Power-to-gas

We’re working on a variety of storage technologies to meet different challenges, such as storing renewable energy where it’s produced. When electricity production exceeds demand in one grid segment, the surplus has to flow to another. When grid congestion prevents this, wind farms in the first segment often have to curtail their output or even go offline to eliminate the surplus and prevent overload.

That’s why we’re working on transforming surplus renewable power into hydrogen or methane. The technology is called power-to-gas or wind gas. In particular, methane (known as synthetic natural gas) could be stored in the natural gas system and in underground gas-storage facilities without limitation.

We’ve been conducting power-to-gas trials for several years in Falkenhagen in northeast Germany, producing more than 8 GWh of hydrogen from renewable power and injecting it in the natural gas system. In May 2018, our existing EU-funded power-to-gas facility was supplemented with a methanation plant, which produces green methane from renewable sources. Unlike green hydrogen it can be made available to a wider variety of sectors, such as manufacturing, power generation, heating, and mobility. But using power-to-gas on a larger scale will require a suitable policy and regulatory environment.

Battery storage

Batteries offer another flexible way to store energy. So far, few battery systems are suitable for utility-scale applications. Yet the importance of battery storage will increase as more renewables capacity is added, since batteries can swiftly balance out fluctuations in renewables output. Along with several partners, we launched the M5BAT project at RWTH Aachen University to further explore the technical and economic viability of utility-scale battery storage and to continue with test operations.

Gas storage

Europe has to import much of the gas it needs. Consequently, our more than 8 billion cubic meters of underground storage capacity in Germany, Austria, and the United Kingdom play an important role in ensuring a secure and flexible supply of gas. Gas can be injected and withdrawn from storage as needed. Our gas storage facilities could also be used to store hydrogen and methane produced from renewable sources.

8.2bn cubic meters

Gas storage capacity

15

Natural gas storage facilities owned and operated in Germany by Uniper. These facilities, which respond swiftly to demand spikes, are indispensable for a secure gas supply.

Gas storage plays an important role in the transition toward a less carbon-intensive energy system because it provides supply security of supply and promotes system stability. Also, given the decline in Europe’s domestic gas production, we expect that the need for flexibility to increase on both the demand and supply side. This will increase the demand for storage capacity, which will make our capacity even more valuable.

Klaus Schäfer, CEO

Gas purchase and supply

Our long-term gas contracts, liquefied natural gas (LNG) procurement, and gas storage facilities help ensure Europe’s gas supply security, particularly during the winter.

In 2017 we procured 406 TWh of gas under our long-term gas contracts. Moreover, we buy and sell gas on a forward and a spot basis at Europe’s trading venues. In 2017 we sold a total of 1,944.8 TWh of gas.

Natural gas is becoming increasingly important outside Europe as well. It’s expected to provide one quarter of the world’s energy in 2040.3 As a global energy trader, in addition to procuring pipeline gas we transport LNG from various exporting countries. We are actively working on diversifying our supply chain, both in terms of suppliers and gas infrastructure.

LNG is becoming an increasingly important ingredient in the world’s energy mix. In addition to procuring pipeline gas, Uniper purchases LNG from Qatar and Algeria and, going forward, North America. Uniper has also long-term capacity bookings as well as stakes in several LNG terminals in Europe. This includes for example an offshore LNG regasification terminal in Italy. LNG itself can also be used as a climate-friendly alternative fuel for heavy trucks, ships, and locomotives. To further optimize our portfolio in a rapidly expanding downstream LNG market, we chartered LNG tankers in 2017. This supports our strategy to diversify and grow our commodity business globally.

Global energy services and infrastructure

We also market technologies and provide energy services to support the efficient management of generation assets as well as infrastructure development. Operation and maintenance of third parties’ existing assets and the provision of engineering consulting for new energy projects is a growing business: in 2017 our activities focused on developing business opportunities in Azerbaijan, India, and South Africa.

Business adaptation and resilience

Volatility is the new normal. The ability to adapt swiftly to changes in the marketplace, the regulatory regime, and society, is crucial. We believe that our role in ensuring a secure energy transition means more than operating large assets in a heavily regulated environment. There are growth opportunities for energy-related services that support other industries and businesses.

We market our experience in integrated, reliable, and tailor-made utility management in emerging and developing countries, providing operation and maintenance (O&M) services for power plant operators as well as support for new energy infrastructure projects. In 2017 we concluded contracts to provide long-term O&M and related services (training, procedures, processes, and engineering) in several emerging countries. These services will enable customers’ power plants to meet high international standards for operational excellence, including their HSSE performance.

We continually expand our knowledge of how to manage and maintain complex industrial facilities. We also market this knowledge to transport system operators and other companies along the energy value chain interested in optimizing their asset management.

We believe that tomorrow’s energy world will be based more on partnerships. That’s why we’re strengthening our partnerships with large commercial customers and working closely with them to design innovative products and solutions tailored to their specific needs.

Digitization@Uniper

Digitization is one answer to a number of challenges inside our company, such as heterogeneous system landscapes and processes that could be further optimized. In 2017 we launched a project called Digitization@Uniper to ensure that information is provided to the right people at the right time, thereby facilitating effective decision-making. This three-year program will deliver significant long-term savings by enhancing efficiency through process and data integration.

The program aims to put even more emphasis on data control and digital technologies for our generation fleet. This will further improve the fleet’s processes, resilience, and competitiveness. It will require a data infrastructure that can give the entire fleet access to system data for rapid, consistent reporting and tracking of key performance indicators (KPIs), advanced analytics, continual process improvement, and timely decision-making.

Digitization@Uniper will take us from using multiple systems and approaches to a more coherent approach to handling maintenance and, eventually, operational data. It’s founded on a new standardized plant maintenance process, essential for an efficient and standardized KPI reporting system as well as for powerful analytics.

1BNetzA, report on the determination of the reserve demand for the winter of 2017/2018.

2Includes run of river and reservoir.

3International Energy Association (IEA) – World Energy Outlook 2017.