Good morning and welcome to this year's annual press conference. We will provide you with a report on the fiscal year of 2023, and if you are here for the first time, I'd like to introduce myself. My name is Fabienne Thielemann , I'm responsible for communication and governmental relationships at Uniper, and in this role I am delighted to be moderating today's press conference. Now, without any further ado, I'd like to briefly explain that we're going to have a Q&A session later. First, you will hear a statement by Michael Lewis, and then by Jutta Dönges, and then we will be happy to hear your questions. I'm looking forward to this event, and Mike, you have the floor.
Thank you, Fabienne. Ladies and gentlemen, I too would like to welcome you to our press conference. I'm very glad to see you, and I hope that from now on we'll meet again in person every year when Uniper publishes its annual report. This is how we did it before Corona, and it ought to be so in future as well. It is also a new start in another respect. Today it is the first time that the entire board is here for a press conference. We all came on board at different times last year. So we're starting this year with a new normal, and you know that normal hasn't been a given for Uniper in recent years. 2022 was a year of existential crisis for Uniper. It was characterized by the termination of the gas supply relationship with Russia and the resulting energy crisis.
This crisis hit Uniper, Europe's largest gas importer and Germany's main systematically relevant energy supplier, particularly hard. Uniper didn't give up and instead stood up for its customers and endured the crisis on Germany's behalf as well. This was possible thanks to the German government's strong decision-making. However, we emerged from the crisis through our own efforts as well. We were able to procure gas from other sources and continue to fully supply our customers.
This enabled the economy to continue producing. Our new energy terminal in Wilhelmshaven alone met around 6% of Germany's gas needs last year. At the start of 2023, gas prices fell sharply again, and Uniper's smart hedging strategy and its efficient use of its power plants enabled it to be very successful in a challenging market environment. This is how Uniper made the extraordinarily large profits in 2023 that you see in our annual report.
In a moment, Jutta Dönges will present Uniper's financial performance to you in detail. We have emphasized several times that we do not expect a repeat of this profit situation. I'll underscore three things about 2023. First, Uniper stabilized both its financial situation and balance sheet in record time. Uniper's implementation—and this is a second—of the EU's remedies in connection with the German government's stabilization package is right on track as well. Thirdly, a completely new management board came on board last year and has since been implementing a new strategy which is aimed at new green growth. The message 'Uniper is back' has also motivated our employees to look ahead. 2023 was the year of our swift comeback, and it was an exceptional year. 2024 will now be the year of new beginnings.
Uniper is not only back, it's more resilient, financially stronger, and more focused than before, and now our message is 'We are back stronger'. Our new strategic course has significantly and permanently reduced our risks. 2022 will not be repeated. 2024 is the first full year of the new Uniper with its new strategy. This also means that our profit situation in 2023 will very much return to normal this year. This normalisation is good, and although the markets remain challenging, we want to leave the period of extreme fluctuations behind us. This is also reflected in our financial outlook for full year 2024. We expect a lower result for 2024 due to falling commodity prices. The market environment and our results are normalising.
You have known our key performance indicators since the week before last, and you also know that we recorded a provision of about €2.2 billion for a probable payment obligation to the Federal Republic of Germany in conjunction with the state aid granted in 2022. This is a requirement stipulated by the European Union in connection with its approval of the German government's state aid for Uniper amid the gas crisis. Jutta Dönges will shortly provide you with detailed information about this matter. I'd like to emphasize that it's appropriate and fair for Uniper to compensate German taxpayers for their willingness to stabilize Uniper in 2022. Our strategy for the years until 2030 foresees a significant acceleration of the energy transition and also our own transformation. We want to completely transform our electricity portfolio by 2030 from 20% green generating capacity today to 80%.
By 2029, we intend to have exited coal altogether. We'll remain the gas market leader, supplying more than 200 TWh of gas annually. We want to gradually transform this 200 TWh portfolio into a green portfolio, and we want to maintain our—and if possible enlarge—our strong customers consisting of roughly 1,000 industrial enterprises and municipal utilities, and our long-term target is to be completely climate neutral by 2040. Our focus this year is on project development and growth.
We are creating the foundation for our company's future. As part of our new strategy, 2024 will be a year of new beginnings in line with our new strategy. We plan to invest around €8 billion in green growth and green transformation projects alone until 2030. The money will flow into our restructured green generation, flexible generation, and greener commodities segments. However, we will also adjust and also prioritize our project pipeline.
We expect the first significant milestones of our transformation this year. Here are just a few of our possible areas for investment. We will decide how to participate in the German government's tenders which are part of its power plant strategy. As already communicated, we believe that the construction of new flexible hydrogen-ready power plants is urgently needed. This also applies to the capacity market announced by the German government. One thing is clear: we are ready. Uniper is ready.
Larger investments in our hydropower business in Germany are an option as well. Hydropower is part of Uniper's DNA in Germany and Sweden and should be developed further where this makes sense and where it is reasonable. Our hydropower business in Germany celebrates its anniversary this year. Our power plant on Lake Walchensee in Bavaria turned 100 in January. Its commissioning also marked the start of electrification in southern Germany.
We expect to invest in additional wind and solar projects this year. As of today, Uniper has already commercially secured several hundred megawatts of wind and solar power projects. Last but not least, we are repurposing our gas storage facilities for a future with hydrogen in the core network, in line with the planned core network for hydrogen. About €200 million of investments are planned over the next five years for our Krummhörn facility alone for a possible conversion to hydrogen. I'm coming to the end of my remarks, and that's how you can tell that I, being an Englishman, don't like long speeches. I'm a pragmatist, and that's why I welcome the fact that the German government recently presented its plans for a new power plant strategy. That's a start. We should never wait for the perfect solution, but simply get started.
This optimization has nothing to do with the fact that Uniper is a state-owned company and that we think everything that's decided in Berlin is a good idea. My point is that every bit of progress counts. For us, the glass is half full, not half empty. Together with my management board colleagues, I examine each individual case to see where it creates opportunities for our customers, for our shareholders, and for our employees. It's about feasibility, affordability, and sustainable business activity, always with people in mind. I've just spoken about Uniper as a new company with a new transformation agenda. Despite all this, Uniper remains what it is: one of the most important energy companies in Germany and Europe, and systematically relevant for power and gas.
Also, Germany's leading gas importer and supplier, and a company whose power plants and storage facilities will continue to play a key role in the transformation of our core markets. Uniper is the beating heart of energy. It plays a singular role in the energy market and has a unique corporate culture—the Uniper way. Thank you.
Thank you, Mike, and I'll hand things straight over to Jutta Dönges, our CFO.
Thank you very much, Fabienne. A warm welcome to our annual results press conference from me as well, ladies and gentlemen. I'm happy to see you here. Today is a very special day for me. For the first time in my role as CFO of Uniper, I have the opportunity to present our financial results for 2023. 2023 was a record year for Uniper. The financial results for the past year are the best that Uniper has ever posted.
These annual results are exceptional in terms of both the amount and the underlying earnings drivers. Adjusted EBIT for 2023 was at €6.4 billion and €1.7 billion above the crisis year of 2022 and within the guidance range published in October of 2023, amounting to €6-7 billion. In 2022, adjusted EBIT was just under minus €10.9 billion. Adjusted net income of €4.4 billion was also within the guidance range of €4-5 billion that we published in October 2023. This figure was about minus €7.4 billion in the 2022 financial year. These exceptionally good earnings are the result of a strong operating performance in a market environment that was generally advantageous for Uniper. In the past year, Uniper benefited to a great extent from hedging transactions for fossil-fueled power generation and the gas midstream business.
By contrast, additional costs for gas procurement to replace undelivered gas from Russia had a massive adverse impact on prior year earnings. Such costs were not incurred in 2023, and additional costs for gas replacement procurement will not be incurred in 2024 either. As announced, we successfully secured our delivery obligations to our customers early in 2023. Uniper, therefore, needed no additional capital injections from the Federal Republic of Germany last year. Uniper drew on a total of just €13.5 billion of the €33 billion originally made available by the federal government. In order for us to avoid delivery disruptions to our customers and to maintain supply security, the federal government's support of Uniper by means of capital injections thus ended earlier than anticipated and was significantly lower than initially expected and approved by the European Commission.
In fact, we were able to record a total of roughly €2.3 billion in cumulative lower costs on gas replacement procurement in the 2023 financial year by using future transactions to successfully hedge our open gas delivery obligations. The fact that we didn't incur any more losses in connection with Russian gas deliveries in 2023 was viewed positively by the rating agency S&P as well. In June of last year, S&P reaffirmed Uniper's long-term credit rating of BBB- but changed the outlook from negative to stable. S&P sees Uniper on a path of steady financial recovery and upgraded Uniper's standalone credit rating. As you know, an investment-grade rating is a decisive element for Uniper's business operations and access to capital markets. Now, let's take a look at our two segments, European generation and global commodities. Both segments contributed to our exceptionally good group earnings.
European generation's adjusted EBIT of roughly €2.3 billion was significantly above prior year earnings of €0.7 billion. This very substantial improvement is especially attributable to earnings on successful hedging transactions for conventional power generation. The return of the German Heyden 4 hard coal-fired power plant to commercial operation had a positive effect as well. The power plant will be shut down permanently at the end of this coming September. After being awarded the contract in the first tender to reduce coal-fired power generation, the power plant had already ceased commercial operation at the end of 2020 but returned to the market from grid reserve in August 2021 on the basis of the Substitute Power Stations Act enacted by the German federal government.
A return to the market is possible through March 2024 at the latest, and after the end of its market return, the plant will be available to the system operator Tennet as a grid reserve power plant until September 2024. In addition, our hydropower business and nuclear business in Sweden benefited from positive price effects, and in the hydro business's case, also from a year-on-year reduction in price discrepancies between the system price and Sweden's price zones. Overall, Uniper's power plants generated roughly 13% less electricity than in the prior year. As a result, our Scope 1 carbon emissions were lower as well, declining by 24%. They amounted to 19.4 million metric tons in 2023. Our carbon emissions totaled 25.5 million metric tons in 2022, excluding power generation in Russia.
Adjusted EBIT in the global commodities segment of just under €4.1 billion was considerably above the prior year figure of minus €11.2 billion. As explained a moment ago, successfully hedging our open gas delivery obligations had a positive impact on earnings. The optimization of our gas portfolio and gas storage facilities was another source of higher earnings. The international portfolio benefited in particular from the LNG business's good performance.
I would now like to talk about the adjusted net income, which largely tracks adjusted EBIT and amounted to around €4.4 billion in the 2023 financial year, which was substantially above the prior year's figure of minus €7.4 billion. The IFRS net income of €6.3 billion was considerably above the prior year net loss of €19 billion. IFRS net income was strongly influenced by the significant drop in commodity prices and the associated valuation of our derivatives.
The IFRS net income was also positively affected by the complete release of provisions recorded in 2022 for additional anticipated further costs in our gas portfolio due to the absence of gas from Russia. Uniper recorded a provision of about €2.2 billion in its consolidated financial statements for the 2023 financial year for an anticipated payment obligation to the Federal Republic of Germany in conjunction with the state aid granted in 2022.
The payment obligation, whose final amount will depend on our full year 2024 earnings, will be due at the start of 2025 and is to be paid using available liquid funds. The full amount of the recorded provision adversely impacts Uniper's annual results. Now, to provide you with some background on this provision, in December 2022, the European Commission approved state aid to Uniper subject to certain conditions.
The EU state aid decision of December 20, 2022, in conjunction with the framework agreement concluded between the Federal Republic of Germany and Uniper on December 19, 2022, obliges Uniper, among other things, to repay to the Federal Republic of Germany any overcompensation resulting from state aid. We will make the payment using available liquid funds, and recording the provision provides additional clarity about Uniper's financial situation.
Economic net debt developed very positively as well. High operating cash flow of just under €6.6 billion resulted in our overall debt going from minus to plus. We posted a positive net cash position of roughly €3.1 billion at the end of 2023. Our economic net debt at year-end 2022 was at €3.4 billion. I would like to take this opportunity to state again clearly that these numbers are exceptional results that benefited from an advantageous market environment.
They cannot be extrapolated into the future. Uniper's renewed financial stability also enabled us to repay our KfW loans in full in autumn of 2023. As a reminder, in October 2022, Uniper had drawn on about €14 billion of its KfW credit line. At the end of June 2023, this significant improvement of Uniper's financial situation made it possible to reduce the credit line to €11.5 billion from the original €16.5 billion. The current KfW credit line will expire in several stages by September 2026. At the same time, Uniper is preparing to use financial instruments contracted with private banks and on capital markets. This will make us even less dependent on government support and increasingly allow us to sail in normal waters. Not just our financial results are outstanding. We have also made good progress in implementing the EU's remedies.
The European Commission's remedies require us to divest certain non-strategic shareholdings by the end of 2026. For example, the sale of our ship fuel trading business in the United Arab Emirates closed in late May 2023. Shortly before this, the sale of our 20% indirect stake in the BBL pipeline had closed. At the beginning of last week, we announced the sale of our 430-megawatt gas-fired power plant in Gönyű, Hungary. Also, the disposal and liquidation of our North American electricity business by means of asset deals have also been initiated and are at an advanced stage.
Ladies and gentlemen, Uniper is in a very solid financial position today and has attractive prospects for the future. The focus of the management board and our more than 7,000 employees is on implementing our strategy and transforming Uniper into a greener company with a sustainable business model.
This is what we want to be measured by. Our strategy and its consistent implementation are the basis for our equity story, with which we want to position Uniper on the capital market as an attractive company for investors. We are working on this continuously. We reached an important milestone for this at the extraordinary general meeting in December. The shareholders' approval of the capital reduction, in principle, restores Uniper's ability to pay dividends subject to further legal restrictions.
The payment of a dividend is an important criterion for investors when deciding to buy a company's stock. This applies to both institutional and retail investors. This means that we have now created leeway for the German government's exit. How and when the exit will take place hasn't been decided, and it is the decision of the Federal Republic of Germany.
But the sooner we create the conditions for it, the better. Let us now conclude by taking a look at the year ahead of us, 2024. At the end of the 2023 financial year, Uniper was divided into two operating segments: European generation and global commodities. Starting in the 2024 financial year, the Uniper Group will be divided into three operating segments: green generation, flexible generation, and greener commodities.
Our new operating segments reflect our group's new strategic course and create transparency on the progress of our transformation. From this financial year onward, we will use adjusted EBITDA to manage Uniper financially. Using adjusted EBITDA will enable us to manage our intended growth in a more targeted way while at the same time focusing on the cash effectiveness of Uniper's earnings.
Adjusted EBIT, which we are currently using, will therefore no longer be used as a key financial indicator for managing our operating business. However, adjusted net income will continue to be a KPI. We anticipate lower earnings in 2024 than in 2023 due to a decline in commodity prices. We expect our adjusted EBITDA to be significantly below the prior year level and in a range of €1.5 to €2 billion. We expect our adjusted net income likewise to be significantly below the prior year level and in a range of €0.7 to €1.1 billion. 2023 was an outstanding, extraordinary year. It certainly cannot be repeated in this form, and we already announced this last fall. The market environment is normalizing, and our results will also be normalizing as well. Thank you very much for listening.
Thank you to you, Jutta. Which takes us, without further ado, to the Q&As. Allow me to note that we would be looking forward to questions from the audience that have joined us online. We have a few attendees whom you can't see. When they post questions, I would read them out so you all know what the question is about. The floor is yours. Let's have your questions. I see a question from Mr. Steitz. Good morning. I have got two questions. Actually, one question to Ms. Dönges or to Mr. Lewis, depending on who wants to take it.
It is about the current valuation of Uniper for the shares that are still traded on the stock exchange. They suggest that the value is higher than that of RWE. Maybe you can explain what the background to that is, to this valuation, and how you see this valuation. That is question one. My second question is about Russian LNG. That is not sanctioned still. So do you receive Russian LNG via your terminals? If not, how do you make sure that there is no Russian LNG coming to Germany from other terminals either?
I suggest that you take this question, the question about the market capitalization. By the way, last time I spoke German or English, this time I will try to do it all in German. Let's see if that works. Let's start with the first question, the valuation of our market capitalization. The problem is that there are too few shares at the moment, 0.8%. So there is no liquidity, and that is the problem. So the German government needs to sell further shares into the market if we want to have a good price, a valid price.
You can look at the analysts' reports if you want an objective valuation. And the second question about Russian LNG. Let me be clear here. We do not receive any Russian LNG. We do not receive any Russian gas. But as you mentioned, we cannot tell what gas we are buying and selling. Once the molecules are in the network, it is all blended. But what I can confirm is we do not receive Russian gas.
Thank you. Let's continue with the question from Ms. Hörning. Hi. Yes, I have got two questions. One about the gas question asked earlier. The economic advisor said that we should have a gas embargo or gas should be sanctioned as well. How do you see that? What would it mean for supply in Germany? As far as Uniper is concerned, you need to sell Datteln, and that is one of the remedies requested by the EU. Are you in negotiations with EPH there? How is that developing?
Your first question, Russian gas has not been sanctioned. I can only say we do not have sufficient natural gas at this point in time. Our storage facilities are pretty full compared with what is normal in February or March. But the main point is that we, as Uniper, do not buy any Russian gas. It is for the politicians to decide whether that should be sanctioned or not. But it will not have any impact on us because we are not receiving any Russian gas at all. The second one was Datteln, Datteln 4, yeah. We have not started that process yet. We will launch a fair and transparent process.
Once we have something to report on the progress we made, we will do so. One additional question on the first part. Would the European market survive without Russian gas? It depends on the price. But according to what we have seen in the last few years is that we managed to replace Russian pipeline gas with LNG in such a short space of time, and we managed all of that. We do have sufficient LNG, particularly at this point in time. I do not know whether you want to comment on that. Carsten?
Yes, I am happy to do that. Sorry. I believe that it is possible in principle, as Mike Lewis said. Ultimately, it is a question of the price. The imports from Russia have declined considerably. I mean, there is LNG as well, and there are gas flows into Austria and Eastern Europe still. It is doable, but it requires the necessary LNG infrastructure for that.
Thank you, Carsten. Thank you, Mike. Frank Messing from Vatz had a question about Datteln 4 as well. I hope the answer given here has answered your question as well. Maybe, if not, you can reword your question. Then on our list, Ms. Krebs next. Good morning. I have two questions. One about the German government's power plant strategy, which you mentioned. Does that strategy make it clear that the coal phase-out will happen until 2030 for most of Germany? So will that be successful? Secondly, the carbon management strategy that has now been suggested. Apparently, CCS is going to be made possible for German power plants, but it will not be promoted. Do you plan to use that option going forward? Michael, I assume we will take both questions.
Yes. Question number one, power plant strategy. One, we are happy that the power plant strategy has now been published. We said last summer that we were waiting for this new strategy. It is not just important for Germany. It is also important for us as Uniper because our corporate strategy means that we will be spending a lot of money in new power plant capacity. But whether we can decommission all of our power plants until 2030 will depend on how quickly this process will be running and how quickly we can develop new generation capacities. But I can confirm that six years is a very tight schedule. We are now starting with 10 megawatts, and we expect 20 to 25 gigawatts to be necessary to replace all of the old power plants. So we need a next step, which is the capacity market. This will only kick in later.
We will do all we can to implement our power plant strategy, and we will have to wait and see whether that is enough or not to decommission all of the coal-fired power plants until 2030. But as I said in my speech earlier, we believe the glass is half full. We will accelerate the energy transition, and we will invest in these new capacities as quickly as possible.
An additional question before we come to the second part of my earlier question. If you only have tenders for 10 gigawatts, which will not happen until the second half of the year, and if you need 25 to exit coal by 2030, then it is clear already that it will not work.
Sorry, I did not get the question.
It is the question of the sequence. Now 10 gigawatts, how do you get to 25?
Yes, the further capacity will come with a capacity market. The first 10 gigawatts will be transferred into this new capacity market, which we will have in future. That is our expectation in any case.
Thank you. My question was also whether it is realistic at all that the coal phase-out can be completed by 2030 largely. Because if you have only tended 10 until now, then it simply cannot work.
As I said, it is going to be very tight. Six years is not a long period to build up so much capacity. CCS, yes, we believe that that is a good development, this new strategy. We have always said here at Uniper that we need to use all possible technologies that are available to reduce CO2 emissions, and CCS can play an important role here in this area.
We believe that CCS is important for blue hydrogen, but it can also be an important solution for individual power plants. Right now, we are working in projects in the UK where you have a process called Track 2, and there we can use CCS for individual power plants, which we are going to do. If we are successful with that process, we believe that all countries in Europe, all countries worldwide should not be dogmatic when it comes to carbon reductions. We are happy that we have a carbon management strategy, and we will think about the details and think about what contribution we can make.
Thank you, Ms. Krapp. The next one on my list is Mr. Böttcher . Hello. Good morning. I have got three questions, if that is okay. You mentioned the $8 billion, which you want to invest until 2030. What I would be interested in is to know where you want to invest and how much of that is already earmarked for any projects and how much is still available on flexible terms. Or maybe you can already subdivide it and allocate it to the three segments which you presented today.
So how much of the $8 billion, according to your current plans, will be spent on the three segments? Question two is you have not finally decided to a certain extent whether you will participate in the tenders for hydrogen-fired power plants. You said you will decide that at a future point in time. What I would like to know is what does that depend on, this decision of yours? So what kind of framework would you expect for you to be able to participate in the tender?
My third question is about the sale of non-strategic assets, and this includes the district heating business as well. This process has already started, unlike Datteln 4, and it has been ongoing for some time. I would like to have some sort of update. When can we expect that to be closed?
I will take the first question, and then Holger, maybe you can take question number two. Question one. We have various opportunities for investing in the future, as we mentioned last summer. There is green generation, flexible generation, and greener gases. Most of these project opportunities or options which we have are in green generation and flexible generation. That is why the German power plant strategy is an important part of this. We have also the conversion of British power plants with CCS and new-built projects with CCS in the UK.
Another major part is wind and solar projects as well. That is a business we are developing now. It is quite small at the moment because we started with a small range of projects. This will happen over the next few years, but I cannot tell you today how much capacity we will develop and how much money we will spend in all of these opportunities. It depends on how the business cases will develop, whether we are successful in the so-called Track 2 process and the power plant strategy. So there are many unknowns at the moment, and for that reason, we have a portfolio that is bigger than $8 billion because we expect some of the projects not to be successful. Holger.
Yes. Question two. The tenders, Mike mentioned earlier that we are preparing our involvement in the tenders for the 2.5 gigawatts. We want to take part, and we believe that with our infrastructure and with the existing power plant portfolio and the sites we have in our portfolio and our capabilities we have, we can develop projects in Germany at German speed. So we are well prepared for that. We now need to wait and see what the actual conditions look like, what the tender conditions, and when the auction will take place, etc. On that basis, will we then take the entrepreneurial decisions which we need to take to bid for some of the projects?
Thank you, Holger. I suggest that Jutta, you take the last question on the sale of the strategic assets. Yes, district heat. That process has not started. What has started, same as for Detton, are internal preparations for the sales process, this particular disposal. Of course, in the run-up, certain things need to be prepared, and we need to communicate this to the market as well, which has not happened yet either.
If I interpret your reaction properly, the answer has been given. This is Holger. Mr. Lewis, you mentioned that you are planning to invest in hydropower. Could you provide us with some details? The government does not see any major growth potential in yours, and is that an option for the capacity market, hydropower, that is? Another question. What is the current status with regard to the environmentally sound conversion of the FSRU in Wilhelmshaven? You also travel to Algeria. Your competitor, VNG, has signed gas contracts. Do you see any? Are you planning any further negotiations or gas deals, especially considering the loss of potential Russian deliveries?
I will address the first question, and then Holger, you can take over for the second, please. As far as hydropower is concerned, we are planning a very specific pumped storage power plant project in Bavaria. We are taking the financial investment decision this year concerning this investment. It amounts to 180 megawatts, very flexible. It is a pumped storage hydropower plant. For the new flexible market of the future, this storage capacity will be extremely valuable. That is our specific project. Holger, the environmentally sound conversion of the FSRU, it is a plant which received an approval on the 16th of December 2022, a license for operation in Wilhelmshaven. Since the beginning of 2023, the license has been reattributed.
We took on this role for the Federal Republic of Germany, but since 2022, the government, DET, the German Energy Terminal company, DET, is in charge of operation. Our subsidiary, LTW, is operating the FSRU on behalf of the Federal Government or DET. As an operator, we are, of course, supporting DET in finding ways and means to optimize operations and to make operations more environmentally sound. Thank you very much, Holger. The last question concerning Algeria. Yes, we went there together with Mr. Habeck . For us, there are two things. Either we will further diversify our gas portfolio or new hydrogen without hydrogen potential. It was only two weeks that we did not make any huge progress. It was only three weeks, sorry. I can confirm that Algeria provides potential for low-cost hydrogen and the diversification of our gas portfolio. Thank you very much.
Ms. Zorga seems to be satisfied with the answer. Then I will pass the floor to Ms. Becker.
I have several questions. I would like to start by a question concerning the tender. If we will be faced with an option of CCS, are H2-ready new builds even necessary at all? We could also simply use the power plants that we have and use CCS technology. The provision that you have made for paying back money to the state, does it have to be utilized? Basically, it does not change anything about the participation of the government. How high are the provisions that you have released related to gas replacement procurement? Ms. Dungus, you mentioned the stand-alone rating that S&P changed. Could you give us some information on what the current rating is, actually?
Now, let us start with the financial questions and then pass the floor to Jutta first, and then we will give you a chance to talk about CCS and the power plant strategy. Jutta, three questions in the financial arena.
Let me start with provisions. Provisions that we have created now, or the provision, is related to an expected repayment resulting from the state aid approval from 2022. The provision was made because we assume that the government's claim is clear and there are no question marks, and that is why we made this provision in our balance sheet, and we assume that it will become effective in 2025.
The period for determining the final amount will end at the end of 2024, and that is why this is a provision that we will have to that will change, potentially change, until the end of 2024 depending on the earnings of 2024. Currently, our best guess this is our best guess for 2024, and we have the figures for 2023, and as a result, we have been able to estimate the amount and make a provision. Now, we expect that this amount will need to be paid. A question concerning provision for gas replacement procurement. This is a provision that we released.
The amount was €6 billion, and we already did this after the first six months of last year because with our obligation to deliver to our gas customers, which have been hedged, we realized that no further losses would be incurred, and the provision that was released was a provision of 2022 associated with gas procurement. Since we knew that these losses would not be incurred, we were able to release the provision. With regard to S&P, we currently have a rating for Uniper, which is investment grade, BBB minus. This remains unchanged, but what has happened in June when S&P looked at the rating was a change of the outlook from negative to stable. Another thing that changed is the composition of the rating. If you look at our rating, we mainly focus on two components.
That is the stand-alone credit rating of Uniper and the support that we received from the government and the fact that the government sees Uniper as a company that is relevant to the system. Originally, the support of the government was assigned to six notches. This was reduced to five notches, and this improvement has an impact on the credit rating so that the investment grade rating of BBB minus that we have now is the same that we had in the past.
Sorry, I did not quite understand that. The support declined from six to five notches, but if nothing changes concerning the overall rating, the rating should have deteriorated. Overall, we have an investment grade rating which included six notches in June, but based on the stand-alone credit rating, that was BBB minus. Now, we made an improvement.
Stand-alone rating is BB. Now, first question concerning CCS. We need these new capacities at any rate. The existing power plants are older than I am in some cases, and that is why it is not just about the reduction of carbon emissions, but it is about efficiency. It is about staff. It is about spare parts. We definitely need new power plants, number one. Number two, we should remain open as far as the technology is concerned and how we can make these new power plants carbon neutral, green hydrogen, or potentially even CCS or blue hydrogen. Now, this seems to answer the questions. I would like to pass the floor to Mr. Finken from Süddeutsche.
Thank you. I have three questions. Two of them are quite detailed. I saw that the nuclear division showed a negative EBIT figure, but I also heard that the environment in Sweden was better. What are the reasons for the loss in the nuclear power plant segment? And another detail, you talked about hedging transactions that you benefited from in the conventional power plant business. Could you explain some details? I assume that you sold electricity at a higher price with forward transactions. And another strategic question.
Mr. Lewis mentioned in interviews in previous publications that he could imagine that the government would get the money back that was employed for saving the company. Now, after these good annual financial results, have you already reached an agreement? If you have said half a year ago that the money could be recovered and now you have this extraordinarily good result, has an agreement been reached? Let us start with the last one, Mike, and then you could give us some information on whether the government is going to get the money back and when, and if everything has been settled already.
As Jutta has mentioned, we made the $2.2 billion provision, which that was the first part of the repayment to the government. But the Federal Government is the owner, or it owns 99.2% of Uniper. The government will get the money back when the government sells our shares. The $2.2 billion only relates to the first part, and that is a specific condition of the EU as part of the state aid package.
When we sell our equity, and that is something that needs to be done, by the end of 2028, 25% plus one share will need to be sold, and then it is up to the government to decide when they sell our equity and how. Thank you for that question. I will pass the floor to Holger Kreetz, who will talk about nuclear energy and provide us with some background information.
In nuclear, we see two effects. On the one hand, we have a market price effect. Market prices that are lower than originally expected. With regard to the EBIT, we also have costs rising due to inflation-related cost increases associated with the decommissioning program in Sweden. This had an adverse effect and non-operating interest effect. If you look into the business, could you tell us, give us some information on hedging commercial power plant transactions?
Your assumption is correct. Yes, we carried out forward transactions, meaning that we sold to customers or to the exchange, and we have to buy fuel and emission allowances. We do this on a forward basis, and we were able to achieve good prices, but that is not something, a special feature of Uniper. Any company that purchases power or generates power through conventional power plants or hydropower acts the same as we do. Does that answer your question, Mr. Finke?
Yes?
Then I will pass the floor to Mr. Tobin.
Thank you. One question about the hydropower plants and the announced project in Bavaria, 180 megawatts. Is that a new project? Will that be a new build, or is it an existing asset which you want to take over?
Maybe, Holger, you can explain that one.
We are talking about Happurg. Is it an existing plant, or is it a new build project? At Happurg, that is a 160 megawatt power plant which we have operated until 2011, a pumped storage power plant. We had a damage in the upper reservoir, and since 2011, we thought long and hard whether it would make sense to repair it, whether we have the market for this kind of flexible generation capacity. Now we have looked at it for the second or third time, and now it makes sense to go ahead with that project. That is why we will take the investment decision at board level over the coming few months and hopefully reach a positive outcome. It will depend on a few things that need to be right. No, it is not a new build project. It is a revamping of the existing site.
And you own that?
Yes, we own that. Own that, yes.
Then a question from Mr. Käckenhoff , please. Try again, please.
One question is about the arbitration proceedings against Gazprom. Is that still ongoing? Are they still ongoing, these proceedings? When do you expect a decision, and what kind of sums are you talking about? My second question is, what share does LNG have when it comes to the supplies from LNG from the US or your overall imports? How do you see that future given the resistance seen in politics in the US? Mike Lewis, maybe you want to take that one.
The arbitration proceedings will conclude this year, and it is now up to our lawyers, and I do not want to preempt anything and do not say anything else now. What I can say, though, is that we will have very strong arguments and argue for what we believe is the right answer there. Once we have a result, we will clearly communicate that. Your second question about the US Carsten, do you want to comment on that? Yes, I am happy to reply.
The announcement by President Biden concerning LNG does not affect us directly because we do not have any projects or contracts that will be affected by that. It concerns new projects that will produce in a few years' time only. That is the situation today. We ourselves have long-term supplies from the US and from Australia. We have a very diversified portfolio. This announcement is, of course, of concern as far as we are concerned. And the share of US supplies, yeah?
What proportion of LNG from the US for us or for Europe? For you. That is a smaller part what we receive from the US if we compare that to our sales portfolio. Okay. Everyone happy? We are being told that is almost 12 o'clock, but Mr. Janssen has a question.
Yes, sorry. Datteln. There, it will depend on the actual legal dispute that is ongoing. You can only start that disposal process once you have clarity on that. Do you already have a timeline there for that process? That is question one. Question two, what I would like to know concerning your power plant strategies. Do you have already identified any sites in Germany that would be particularly suitable for an upgrade or conversion or whatever project you want to carry out there?
Shall we start with the last one? Talk about the sites first? Maybe, Holger, you can start on that one. Yes. We have identified sites. We are developing a number of sites anyway as part of our Coal Phase Out program, and we regularly look at our sites to see how we can support the energy transition at these sites.
Also now, as part of the power plant strategy, we do not want to say just now which ones they are because it will depend now on the tender conditions, what role the actual locality will play in the process, and the proximity to a gas network and to a potential hydrogen network. But yes, we are looking at specific sites at the moment. I see Mr. Janssen nodding. Now, Duttelen four, and the current questions concerning the impact on the sales process. Maybe, Jutta, can you comment on the impact of the legal dispute on the sales process?
Yes, of course. Such a dispute has an impact on the sales process. So any matters that are not finally resolved at the time of the sale, for that, certain provisions will have to be made as part of an SPA, so a sales agreement, and then talk about the risks that might come with a negative arbitral award.
Okay. Let me look at the online audience. Let me read out the question in English. Your hedging figures show that you locked in 70% of your German hydrogen generation at around €128 per megawatt hour for 2025. That is much higher than present power prices, which are still falling. Is this an indication that you are well-positioned to be very profitable next year across your generation portfolio, especially if prices keep falling? I would put this question to Carsten.
To be honest, since this question refers to the German hydro portfolio, I need to say that this is not the major bulk of our generation portfolio, but nevertheless, it is correct. We have prepared ourselves very well there, and as we heard in connection with the earlier questions, we have generated good prices in the forward market. I am not entirely sure what next year means, whether it is 2024 or later, but I can generally say that we have locked in our power plant positions pretty well.
I do not see any further questions. Jutta, did you want to add to that? The question relates to 2025 and therefore German hydropower, we said in our analyst presentation. I think this is where the question is coming from when looking at the detailed numbers.
70% of that is hedged, but Carsten, as you said, it is a relatively small volume of our overall volume, and the very high price has to do with the fact that we have high prices for GOOs, so guarantees of origin, which need to be taken into account as well. So, Ms. Sorge, you have the honour of the last question. Thank you.
It is again about your share in the OPAL pipeline, which there is a disposal process ongoing. Prior to the energy crisis, this had progressed quite well, so has this been continued? Do you have any further progress there now? And my very final question would be concerning Russian LNG. With the new gas market directive at EU level, member states have been called upon to exit from the purchase of Russian LNG. This directive will be implemented at the national level on short notice. Do you expect Russian gas in your pipeline mix to go down further as a result of that? Two questions. Maybe, Jutta, you can take the question about OPAL and the state of that disposal process.
Yes, I am happy to do that. You are right. OPAL is on the list of projects that are being disposed, and we had a project which was stopped as part of the crisis. Same as for all the other assets on the list, we need to have completed the disposal process by the end of 2026, and that is all we can say for this point in time. We will start that process at the right point in time. Now, Mike Lewis, as we said earlier, we do not have any Russian gas in our portfolio, so for that reason, the development of Russian LNG is not going to affect us. Mike Lewis had the honor of the last word or the last answer here.
There were a few questions about tomorrow's energy market and the role of Russian gas going forward, same as the future of the power plant strategy. We are happy to discuss that with you, for those of you who are here physically, and you can also work from here if you want to. We will be around to answer any questions you will have. The press team will be around, the board will be around for any further questions. The same is true for the online listeners.
If you have any questions following today's press conference, please do not hesitate to call us. With those words, on that note, I would like to close this year's press conference, and I look forward to next year. Thank you.