VNG 2030+ Group strategy
Shaping energy supply with gas molecules
Gas molecules will continue to play a central role in the energy system, both today and in the future. At the same time, the expectations for the demand for methane, hydrogen and other technologies vary. For this reason, we are pursuing a clear strategic course with high flexibility.
Step by step for more flexibility
The energy sector is shaped by geopolitical uncertainties, regulatory changes and volatile markets. We are responding to this with a clearly defined phased approach: We invest selectively where demand, economic viability and the regulatory framework align, enabling us to remain flexible and mindful of risk. We are beginning by strengthening our core business and selectively expanding our infrastructure – for example in sales, biomethane and hydrogen-ready networks. At the same time, we are advancing the development of the hydrogen system in eastern Germany. In a second step, and subject to market developments and the regulatory environment, we plan to expand our electrolysis capacity, H2 import infrastructure and potential carbon management infrastructure, alongside generation, import and storage capacities. We will only invest where economic viability is assured, as transformation can only be successful if it remains affordable.
Up to 5 billion euros for a future-proof energy supply
By the mid-2030s, we will invest up to 5 billion euros. These investments will be targeted in areas where we are currently strong and wish to continue growing. In particular, these areas include our core business with natural gas as well as biogas and digital networks. This will strengthen our market position and lay the foundation for the energy supply of tomorrow.
All investments follow a clear principle: we consistently consider supply security, affordability and climate protection together. Our ambition is to actively shape the transformation of the energy system while acting economically responsibly as a company.
Customers set the pace
We place our customers at the centre. We consistently align our offerings with their needs and actively support them in the transformation of their energy systems. This also opens up new market opportunities.
Strong foundation
VNG has a strong foundation: an integrated business model across the entire energy value chain, long-standing experience with critical infrastructure and reliable partnerships. This provides stability and is the basis for further growth.
How strategy and our mission statement shape our actions
Our strategy aims to provide energy that is secure, economical and increasingly decarbonised. This ambition is also enshrined in our corporate mission statement. In line with our corporate purpose which is “We provide energy when and where it is needed”, we define ourselves as a leading energy company with a key role in assuring reliability of supply now and in the future, as a driving force behind the transition to a renewable energy system, with a regional identity in our DNA and as a strong regional partner. >> more
Business activities in the future energy system
Building on a strong core gas business, VNG is consistently expanding its business activities.
(schematic diagram)
The graphic illustrates VNG’s future business areas along the energy value chain.
In the import segment, VNG procures natural gas via pipeline-based deliveries under its own long-term contracts as well as via LNG, which is regasified at import terminals and then supplied as natural gas. In this way, we continue to ensure a diversified and stable procurement base.
In the generation and asset-based procurement segment, VNG operates biogas plants through its subsidiary BALANCE in order to produce renewable electricity and biogas. The biogas is upgraded to biomethane and fed into the natural gas transmission network. At the same time, local consumers in the vicinity of the plants are supplied with district heating. In addition, VNG develops projects for the production of green and low-carbon hydrogen. Technologies used include electrolysis, steam reforming in ATR plants with CO₂ capture, and ammonia (NH₃) crackers.
In the gas infrastructure segment, VNG acts as an operator of critical energy infrastructure through its subsidiaries ONTRAS and VNG Gasspeicher. ONTRAS is responsible for the long-distance transmission network for natural gas in eastern Germany, as well as parts of the future hydrogen core network. VNG Gasspeicher operate underground gas storage facilities, thereby also contributing to security of supply. In the future, selected sites will be used for hydrogen storage. At the same time, VNG is expanding digital infrastructure via the GDM Group, laying fibre-optic backbone lines and regional fibre networks all the way to household connections. With the Carbonect project, we are also developing approaches for new business models along the carbon management value chain.
Interview with Oliver Hill and Mike Diekmann on the VNG 2030+ corporate strategy
The VNG 2030+ strategy foresees investments of up to five billion euros over the next ten years. In the interview, Oliver Hill (Head of Corporate Development) and Mike Diekmann (Head of Strategy Implementation) explain how VNG is shaping this path.
VNG has announced plans to invest up to 5 billion euros in its business. What does this mean in practice?
Hill: That’s right – over the coming years, we intend to implement the largest investment programme in VNG’s history. We will primarily invest where we are already strong and can continue to grow. Therefore, the funds will be directed towards further expanding our core business and gas infrastructure, establishing the ONTRAS H2 start network and the expansion of biogas and digital infrastructure. We also intend to advance the further development of the hydrogen value chain and, in the longer term, the CO2 value chain in a measured and pragmatic manner.
Diekmann: With our strategy, we are aligning our business to invest, transform and grow. The demand for secure energy supply remains high, and therein lies our strength: we have been operating critical infrastructure for many decades and source gas from various international supply sources, including LNG imports. We remain committed to this and will continue to expand this business. At the same time, we keep decarbonisation in focus. Hydrogen, as well as biogas and biomethane, play an important role in this regard.
How do you ensure that VNG remains flexible and keeps risks under control while undertaking such a significant investment programme?
Hill: Our business environment has become significantly more volatile in recent years. This affects the entire industry. That is why we have developed a phased approach to implementing our strategy, giving us the flexibility we need. Only when there is demand from the customer, the regulatory framework is in place and the economic viability for projects is assured will we take advantage of our growth and investment opportunities. These are based on robust and economically sound decisions.
The German hydrogen market has recently been marked by a degree of disillusionment. How do you view this?
Diekmann: From our perspective, there is no way around the transformation of energy supply towards decarbonised gases. For this reason, VNG has invested early in biogas and initiated hydrogen projects. And we remain committed to this too. What remains uncertain, however, is how and on what timeline we can implement our projects under real market, cost and regulatory conditions in a way that ensures their long-term viability. Currently, we are focusing on customers and industrial applications that have the greatest potential for implementation. We are also advocating for reliable framework conditions.
