Annual Report 2014 | Suomeksi |

Group business structure

(on 31 December 2014)

Reporting segmentPower and TechnologyHeat, Electricity, Sales and SolutionsRussiaDistribution
Reporting segmentPower and TechnologyHeat, Electricity, Sales and SolutionsRussiaDistribution
Division

Hydro Power and Technology
Nuclear and Thermal Power

Heat, Electricity Sales and Solutions

Russia

Distribution

BusinessHydro, nuclear and thermal power generation, Power Solutions with expert services, portfolio management and trading as well as technology and R&D functionsCombined heat and power (CHP) production, district heating and cooling activities and business to business heating solutions, solar business, electricity sales and related customer offering and Corporate SustainabilityPower and heat generation as well as heat distribution in Russia. Fortum’s holding in TGC-1 of 29.5%, which is correspondingly accounted for as associated company using the equity methodFortum's distribution activities in Sweden.
Geographic presence, production and distribution assets and/or customer base
Geographic presence, production and distribution assets and/or customer baseProduction in Finland and Sweden
* In Finland and Sweden full or co-ownership in 159 hydropower plants
* Two fully-owned nuclear reactors and eight co-owned nuclear power plant units
* One co-owned and two fully-owned condensing power plants
* Ownership in three wind power companies
Expert services worldwide
Finland, Sweden, Norway, Poland, Lithuania, Latvia, Estonia, India
* 12 CHP plants
* Hundreds of heat boilers
* Two solar power plants in India
Heat supply to one million homes in the Nordic and Baltic countries and Poland
 ~1.3 million electricity sales customers
Russia
* Eight CHP plants
* One condensing power plant
* Several heat boilers
* ~500 km networks as well as heat supply to two million residents
TGC-1 owns and operates hydro and thermal power plants in north-western Russia as well as heat distribution networks in St. Petersburg
Sweden
* over 70,000 km of distribution lines
*22,100 substations
Over 900,000 customers
Market position* Third largest power producer in the Nordic countries
* Among the 15 largest in Europe and Russia

* Leading heat supplier in the Nordic and Baltic countries and Poland

* Sizable power and heat utility in Western Siberia and the Urals in Russia



Production capacity 

Power 9,063 MW
Heat 0 MW

Power 803 MW
Heat 3,936 MW

Power 4,758 MW
Heat 13,466 MW 

 

Volumes

* Power production in Nordic countries 47.1 TWh 
* Total power production
47.9 TWh

* Heat sales 7.9 TWh 
* Electricity sales 16.5 TWh
* Electricity sales 26.5 TWh
* Heat sales 26.0 TWh 
* Distribution transmission 17.6 TWh
* Regional network transmission 13.8 TWh
SalesEUR 2,156 millionEUR 1,332 million EUR 1,055 million EUR 751 million 
Share of Fortum's sales41%25% 20% 14% 
Comparable operating profitEUR 877 millionEUR 104 million EUR 161 million EUR 266 million 
Comparable EBITDAEUR 998 millionEUR 204 million EUR 304 million EUR 416 million 
Net assetsEUR 6,001 millionEUR 2,112 million EUR 2,597 millionEUR 2,615 million
Comparable return on net assets14.2% 8.7%5.6%9.3%
Capital expenditures and gross investments in sharesEUR 198 millionEUR 124 million EUR 367 millionEUR 147 million
Employees 1,6391,8074,213390
Business and result drivers
Business and result drivers* Nordic power supply-demand balance, volatility and price; stability through hedging
* About 90% of production is hydro and nuclear power: hydrological situation, nuclear power availability, and prices of fuels and emission allowances
* Maintenance and asset lifetime management practices and costs
* Investments into new or existing generation
* Steady growth through investments; newly commissioned CHP plants bring earnings
* Fuel and CO2 emissions allowance prices and fuel availability, flexibility and efficiency
* Production primarily in CHP plants: power supply/demand balance, volatility and price affect profitability; stability through hedging
* Heat and auxiliary product prices
* Heat demand: weather conditions as well as macro and local economy
* Maintenance and asset lifetime management practices and costs
* Investment programme: earnings growth through new capacity and new volume
* Guaranteed payments for the generation capacity built after 2007 under the Russian Government's capacity supply agreements
* Production mainly CHP: Power supply-demand balance as well as price level and volatility in the Urals/Western Siberia
* Plant availability, production optimisation and efficiency upgrades
* Fuel prices and availability as well as gas and electricity price ratio
* Development of heat market in the long term as well as heat demand and tariffs in the short term
* Maintenance and asset lifetime management practices and costs
* Long-term optimised levels of investment and maintenance of networks
* Distribution volumes: weather conditions and macro and local economy
* Stable earnings with regulated tariffs
* Cost-efficiency and quality of service
* Grid availability and service level; liability to compensate for distribution interruptions
* Maintenance and asset lifetime management practices and costs



Strategy drivers
Strategy drivers* Existing CO2-free, flexible and market-driven production portfolio
* Solid position and competence in hydro and nuclear production in the Nordic power market
* Liberalisation and integration of European power market

 

* Need for increased resource-efficiency
* Potential for increased usage of local biofuels and waste
* Solid position and competence in flexible multi-fuel CHP production
* Liberalised and privatised power and heat market
* Economic development
* Boosting efficiency of existing operations and bringing the ongoing investment programme to completion
* Potential for improved operations on the basis of current assets modernisation
* Cost efficiency through economies of scale and lean processes
* Technical development utilised for a more efficient, reliable and smarter network enabling sustainable and energy-efficient solutions for customers
* Unbundling and harmonisation of Nordic/European electricity distribution sector

 

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