Dusseldorf In view of the forthcoming nationalization, Germany’s largest gas trader is increasingly becoming the focus of critical observers. In a few weeks, the existing Uniper shareholders are to approve a takeover by the federal government at an unscheduled general meeting.
In a letter to Chancellor Olaf Scholz, Economics Minister Robert Habeck and Finance Minister Christian Lindner, ten non-governmental organizations (NGOs) are now demanding that the federal government radically transform Uniper. In the letter that was sent to the politicians on Tuesday evening and that is available to the Handelsblatt, organizations such as Greenpeace, Deutsche Umwelthilfe and WWF write: Uniper’s rescue must be “linked to clear conditions”.
The organizations are calling for Uniper to phase out coal by 2030. That would also mean the premature shutdown of Germany’s most modern coal-fired power plant, Datteln IV. They demand that Uniper no longer imports any gas from Russia, including liquefied natural gas (so-called LNG). You speak out against long-term LNG infrastructure and long-term LNG supply contracts. And they are demanding that the majority of Uniper’s Management Board and Supervisory Board be re-staffed – with people who are familiar with wind, solar energy and green hydrogen.
The claims are notable for several reasons. On the one hand, the green organizations are making demands that should be in the interests of the green economics minister – on the other hand, he is currently shelving his own positions in order to make Germany’s energy supply independent of Russia in the short term. In addition, he has to deal with a company that is likely to be in crisis for years.
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In addition, some of the allegations by the NGOs coincide with the assessments of other industry observers. The question as to what extent the federal government would have to take action on Uniper is becoming louder and sharper.
Criticism of lack of transparency
At the regular Uniper Annual General Meeting in May, the savings bank securities house Deka, which was a minority shareholder in Uniper, did not approve the actions of the Management Board and Supervisory Board due to “governance deficiencies”. Ingo Speich, Head of Sustainability and Corporate Governance at Deka, says: “Uniper has clear weaknesses in corporate management.” The reporting is not sufficiently transparent.
According to Speich, the frequent changes in ownership and management at Uniper may have contributed to the lack of leadership and transparency he named. Uniper was spun off from the Eon group in 2016 as the “resterampe” for the fossil power plants. In 2017, the Finnish state-owned company Fortum announced that it wanted to take over part of Uniper – and was met with firm rejection from the management at the time.
In 2020, however, Fortum took over the majority in Uniper and replaced the Uniper boss in the following year. Klaus-Dieter Maubach followed Andreas Schierenbeck. There was also a new Chief Financial Officer, Tiina Tuomela, coming from Fortum.
The authors of the Uniper letter to the federal government are skeptical about the current Uniper board members. Sonja Meister from the Urgewald organization involved in the letter criticized that Uniper had “in no way undertaken a transparent, public investigation of the Russia debacle”. She says: “On the day before the war in Ukraine, Uniper’s CEO Maubach spoke out in favor of commissioning Nord Stream 2 and repeatedly defended Gazprom as a reliable partner even after the outbreak of the war.”
Others also criticize Uniper’s handling of the risk factor Russia. Deka expert Speich says: “Geopolitical risks have taken on a new dimension for companies as a result of the Russian war of aggression and its consequences.” Uniper is currently having to realize this painfully, as the company is no longer getting Russian gas through the Nord Stream 1 pipeline and has to do without it Buying gas at the market is expensive.
“Risks” from “Efforts to use renewable energies”
However, Uniper obviously did not want to believe that it could come to this until shortly before the start of the war. The consulting firm GeoEconomica points this out: In the annual report that Uniper published on February 23 – i.e. one day before the Russian attack on Ukraine – the company rated its “political and regulatory risks” as “moderate”.
According to Uniper’s definition, a moderate risk means that, in the worst case, there is a one percent probability of earnings-related damage averaging between 20 and 100 million euros per year. The reality in the course of the Russian conflict: Uniper has at times recorded losses of more than 100 million euros per day.
Uniper’s annual report also states that further risks arise from “stricter emission standards, strong efforts to reduce greenhouse gas emissions and the use of renewable energies”.
The federal government’s goal of generating around 80 percent of Germany’s electricity from renewable sources by 2030 is likely to fall under a “strong effort to use renewable energies”. And now it’s the federal government itself that must manage Uniper’s future and the company’s risks.
With regard to the federal government’s entry into Uniper and the group’s business activities, an industry expert says: “The new major shareholder will neither enjoy nuclear power plants in Sweden nor be enthusiastic about energy production in Russia, nor about Datteln 4”.
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There are also accusations that environmental organizations have been making against Uniper for a long time. It is about Uniper’s business with states whose regimes are accused of human rights violations – for example with the state oil and gas company SOCAR of the Republic of Azerbaijan.
The federal government is likely to find it difficult to react to such issues. In order to secure the energy supply in Germany, it is trying to secure gas supply contracts with much-criticized countries such as Qatar and the United Arab Emirates.
It is clear, however, that the federal government must consider a solution for Uniper’s daily losses of millions. Uniper should announce exactly how high they are now on Thursday. Then the group presents quarterly figures.
More: Relief from the gas price brake must be taxed.