The Role of Gas in Decarbonizing Europe Keith Martin, Chief Commercial Officer, Uniper SE The European Gas Conference, Vienna January 31 st, 2018
Uniper at a glance Our operations Power Generation Commodity Trading Energy Storage Energy Sales Energy Services Main activities We operate in 40+ countries around the world 2.1bn EBITDA in 2017 100 years Experience ~38 GW Generation capacity Gas fired power plants Coal fired power plants Gas storage Regasification Hydroelectric plants Trading Nuclear plants Energy sales to small and large customers Gas infrastructure Service 2
Well positioned along the entire gas value chain Strong asset base at the heart of the gas value chain Supply Portfolio Procurement of in total ~1,700 TWh from domestic and foreign producers Thereof roughly 400 TWh contracted long-term with time and volume flex Market-reflective pricing Infrastructure shareholdings and bookings LNG Regas Transmission Shareholdings in OLT Regasification terminal with regulated earnings LNG bookings in Gate and Grain and access to terminals in Spain with the ability to bring additional volumes into the market Shareholdings in major European transit pipelines Bookings across Europe: Hub-to-hub Market entry-exit Storage entryexit BBL OLT Nord Stream II OPAL Transitgas #3 storage player in Europe with a flexible, diversified storage portfolio 8.2 bcm of storage capacity Market Capacity Storage Uniper Market Share ~30% 21% 3% 25bcm 8bcm 5bcm Sales Portfolio Gas Sales of in total ~1,700 TWh, thereof around 20% 2 contracted to traditional sales customers with specific demand patterns More than 1,000 customers, mainly city works, industrials and power plants Gas, power, energy related services Market share ~40% 1. Reflecting annual contracted quantity (ACQ) and not minimum offtake obligation 2. Volume depending on gas to power demand and temperatures 3
Increasing European import need driven by decreasing indigenous production EU 28 Indigenous supply, demand scenarios and import requirements bcm/y 600 500 Current & future supply options North Sea 400 300 EU-28 import need Rising range from ~200 to LNG Russia 200 100 0 Norway EU-28 indigenous supply 2010 2015 2020 2025 2030 ~290 bcm North Africa (1) 1 East Med South. Corridor (2) Source: IHS Cera, July 2016. European Long Term Supply & Demand Outlook 1) Pipeline + LNG 2) Azerbaijan, Irak, Iran, Turkmenistan 4
Ambitious decarbonization achievable with gas 6,000 2030 >40% Reduction in GHG emissions COP 21, 2015 Goal set by EU Council decision Million tonnes CO2-equivalent 4,500 3,000 1,500 0 1990 2000 2010 2020 2030 2040 2050 Int. Scope Dom. Scope WEM Projections WAM Projections -20% target -40% target Source: EEA, 2016 5
Regulatory pressure on coal (example UK / France) Up to 45% greater efficiency than coal-fired plants 42% reduction in CO 2 emissions achievable Up to 67% greater efficiency than traditional oil-fired boilers 25% reduction in CO 2 emissions compared to diesel 95% reduction in particulate matter emissions vs. diesel and marine bunker fuels Source: UK DECC, 2014; Deutsche Bank, 2011; IEA, 2016, VDI, 2014, Volker Quaschning; NREL, US DOE, 20022; IGU 2015; ITG Dresden, Prof. Oschatz, 2014; NGVA/IPCC, 2015 6
Outlook for gas to power in EU is positive Gross electricity generation EU28 (TWh el) 867 847 566 362 274 773 718 778 790 767 581 655 563 682 655 376 375 379 387 395 463 527 608 619 692 442 797 734 329 925 732 231 945 408 821 Nuclear Coal Oil Gas Biomass Hydro Wind Solar Other 2015 2020 2025 2030 2035 2040 2045 Share in gross electricity generation EU28 2020 Solar Other Wind Nuclear Wind 2035 Solar Other Nuclear Hydro 23% Hydro Biomass 17% Coal Biomass Gas Oil Source: European Commission, EU Reference Scenario 2016, https://ec.europa.eu/energy/en/news/reference-scenario-energy 12% Coal 22% Oil Gas 7
Gas industry invests into new market segment LNG for trucks, Uniper founded LIQVIS GmbH 2015 2016 2017 until 2020 Source: Uniper/Liqvis Foundation Member of LNG- Successful Taskforce implementation of first pilot projects Participation at IAA (Sep.2016) Opening Berlin (April 2017) Market needs a minimum of 20 LNG fueling stations 1,000 trucks 8
LNG supplies enable global decarbonization of power generation Seaborne LNG trade in 2020: more than 450 bcma (+155 bcma from 2014) Source: Uniper graph based on WoodMac GGM 2015 H1; rounded figures 9
We provide projects and concepts to enable growth and decarbonization in a global market Example Uniper projects LNG supply Canada Up to 4.8 mtpa / 20 years supply contract signed, based on North-western European hub pricing with global destination flexibility Gas midstream Long-term gas supply signed with the Azerbaijani state company SOCAR in context of Shah Deniz field - planned start in 2020 Source: Uniper LNG supply USA Up to 0.9 mtpa / 20 years supply contract, signed with global destination flexibility Pavilion LNG Capacitiy Sharjah LNG supply & infrastructure Build Pacific position with contractual agreements and joint ventures in LNG trading and logistics Planned joint venture to supply LNG into United Arab Emirates (Sharjah) to supply local customers 10
Can technology be a game changer? batteries can provide short term flexibility, but are very expensive to provide long-term and seasonal storage power to gas has the ability to provide long-term storage for electricity, and can link the gas network with the electricity system hydrogen can effectively decarbonize natural gas to approx. 1/3 of its emissions 11
Gas is reliable available environmentally friendly and will drive global decarbonization! Any questions? 12
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