Utility Uniper could buy hydro plants and expand the lifespan of a Swedish nuclear plant it co-owns with top shareholder Fortum to help plug the gap from a planned phase-out of coal in Germany, its chief executive said.
Outlining the company's basic strategy ahead of an update planned for March, Andreas Schierenbeck, who led Thyssenkrupp's elevator division before joining Uniper in June, is currently overhauling Germany's third-biggest listed utility.
Schierenbeck said that while current investments in growth - which average at about 400 million euros ($441 million) a year - were significant, the challenge was to spend them in a way that creates value.
"Industry transformation will always cost you some money. The coal assets will be phased out and we have to replace these cash flows," he told Reuters, adding this would also include plant retrofits and new gas-fired power plants.
Germany is planning to phase out coal by 2038, but the legal implementation, which includes details about how plant operators will be compensated, was delayed into next year.
Uniper has about 9.2 gigawatts (GW) of coal capacity, about a quarter of its total installed capacity. Hydroelectric stations account for about 3.6 GW.
Schierenbeck said the group could make small acquisitions of renewable assets, such as hydroelectric power stations and was also thinking of pushing for a lifetime extension of its 1.45 GW Oskarshamn 3 station in Sweden by 20 years to 2065.
Uniper co-owns Oskarshamn with Finland's Fortum, which has unveiled a plan to raise its stake in Uniper to at least 70.5% from 49.99% currently by buying the stakes of activist funds Elliott and Knight Vinke.
Uniper remains concerned that a full integration with Fortum could threaten its 'BBB' investment grade rating, Schierenbeck said.
"They just stated that there won't be a domination agreement and break-up for two years. But nothing more. It would be good to hear from them how they see the strategic fit," Schierenbeck said. "The rating is a red line for us."
He also said that the open season auction for its planned liquefied natural gas terminal in Wilhelmshaven, which was launched in May, had fetched interest for more than twice the terminal's annual capacity.
The terminal, which will cost 400-500 million euros to build if approved, will have an annual capacity of up to 10 billion cubic metres.
