Uniper buys hydropower in 2026 and 2027 to hedge against future price increases

In its presentation to analysts on Thursday, German utility Uniper said that it had sold large quantities of future hydropower and nuclear outputs as part of its hedge strategy.

Uniper said that it had sold 40% of German hydropower for 2026, at an average price per megawatt-hour of 92 euros (107.29 dollars), and 60% in 2027, at a cost of 86 euro/MWh. It was discussing the nine-month earnings and strategy of 2025.

LSEG data show that the wholesale benchmark price of German electricity from all sources for 24 hours a day in 2026 was 90.4 euros, while it was 86.9 euro for 2027.

Hydropower is affected by the weather and support schemes, as well as the different fuel types at wholesale.

Hedging is used by producers to protect themselves against price fluctuations and lock-in forward production prices that are deemed favorable at a particular point in time.

Wholesale market rates are used to monitor price trends and evaluate a utility’s physical assets.

The presentation showed that Uniper had sold 95% (133 euros) of its German production for 2025, after the 2024 sales averaged 58 euros. The weather was the main reason for the difference.

The company operates other coal, gas and nuclear power plants in Europe as well as wind- and solar-powered generation units that are not shown on the slides.

Uniper reported that it had sold 60% of its nuclear and hydropower output in the Nordic region for 2026, 35% for 2027, at an average price of 38 euros/MWh, respectively. It has already achieved 38 euros/MWh for 95% 2025 output, and 43 euro/MWh for 2024. Reporting by Vera Eckert. $1 = 0.8575 Euros

(source: Reuters)