Uniper details 2024, 2025 German and Nordic power hedging

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FILE PHOTO: Illustration shows Uniper logo

FRANKFURT (Reuters) - German utility Uniper has sold sizeable quantities of its future hydropower output as part of its hedging strategy, the company said in a presentation for a call with analysts on Thursday.

Uniper has sold 85% of its German hydropower output for 2024 at an average price of 28 euros ($31.02) per megawatt hour (MWh) and 15% of the output in 2025 at an average of 146 euros/MWh, it said.

By comparison, the German wholesale benchmark price for round-the-clock power from all generation sources in 2024 closed at 145.3 euros on Wednesday, and 2025 at 124.5 euros, Refinitiv Eikon data showed.

The price discrepancies come from pricier fuel elements in the overall wholesale level, that includes gas-generated power, and hydropower market conditions that are partly subject to national support schemes and hard to predict weather patterns.

Hedging is used to reduce the impact of price volatility and to lock in forward production prices considered favourable at a certain point in time by a producer.

They help the wholesale market track price trends and a utility's physical asset position.

Uniper sold a small slice of 2023 output at 7 euros in the first quarter and 95% of the year's volumes spread over the second through fourth quarter period at 32 euros, the slides also showed.

Uniper also operates coal, gas-fired, nuclear, wind and solar power generation plants in Europe.

Regarding Nordic region prices, Uniper sold 30% of nuclear and hydropower for 2024 and 5% of that output for 2025 at averages of 40 euros and 36 euros respectively, having achieved 58 euros for some 2023 Nordic region output in the first quarter, and 26 euros for 60% of Nordic 2023 output in sales spread over second through fourth quarter.

Uniper swung to a first-quarter profit of 6.7 billion euros.

($1 = 0.9025 euros)

(Reporting by Vera Eckert; Editing by Mark Potter)