2017 was a steady year for EPV Energy and met most of our expectations. Many projects and reorganisations were completed and the company’s financial status remained stable. The emissions from EPV’s energy production continued their decline. As a result of our persevering and systematic work, the unitary emissions of EPV’s electric power plants in 2017 were only slightly more than a third of their 2010 level. The EU’s decisions, which have been partly completed and are partly still in progress, and which will impact the energy sector significantly, appear favourable for the strategy chosen by EPV Energy.
The changes in the energy sector continued in 2017, and the EU made several policy decisions that will affect the sector for a long time to come. One of the most important decisions made concerns the reform of the EU Emissions Trading System (EU ETS), which was a result of the parties involved reaching an agreement on tighter policies for emissions trading. This agreement reflects the general increase in concern for the effects of emissions, and the current tightening of policies on emissions trading will enforce the status of the measures taken to prevent climate change. This agreement, as well as the policies concerning the EU energy sector in general, were well aligned in 2017 with EPV Energy’s strategic orientation, and the company’s strategy for reducing emissions still seems just right.
EPV Energy’s strategic orientation is well aligned with the EU’s energy policies
However, the decision-making process is still unfinished for many issues that will have long-term effects (2020–2030) on operators in the energy sector, as is the analysis of the effects. Decisions are eagerly expected, for example, on the production of renewable energy and the related targets and mechanisms. These decisions will significantly influence the operations of many actors in this sector, and their delay is causing uncertainty in the market and postponements of actors’ own decisions. Similarly, the examination of the effects of the directives concerning the use of forests is unfinished, and views on how these regulations will impact Finland vary.
Power shortfall and problems with profitability are hot topics in Finland
In Finland, no significant decisions affecting the energy sector were made in 2017. Instead, the power generation problem and increasing power shortfall have been widely discussed. No actual solution to the problem is in sight even now, and no capacity market will be implemented in the Nordic countries for the foreseeable future. Unfortunately, it seems a strong possibility that the issues will not be resolved until concrete problems occur, and the experiences already gathered of the legislation in the energy sector, which was enacted at high speed, are poor.
There are slight positive signs that the profitability of power generation is improving, because the general positive economic climate also increases electricity consumption. Other factors behind the increased electricity consumption include, for example, advancements in transport solutions, various heat pump solutions and data centres. Despite the slight improvement in the sector’s outlooks, the production of thermal power especially is in an acute crisis and its volume will continue to decline unless some special measures are taken.
Nuclear power proceeds – hydropower is stirring up debate
The key objectives of EPV Energy’s measures in the field of nuclear power have been to ensure the excellent availability of the Olkiluoto 1 and 2 power plants, as well as continuing their service life as far into the future as possible. Significant advances were made in the commissioning of Olkiluoto 3 when cold tests led to hot tests in December 2017. Based on the plant supplier’s most recent statement, the plant is expected to become ready for production in May 2019.
The general domestic discussion has lately moved mostly away from nuclear power and towards hydropower. The building of fishways in connection with hydropower featured prominently in the discussions of 2017. Measures aimed at restoring migratory fish species and their implementation are important for Finland and Finnish hydropower generation. What is striking about the hydropower dialogue is the small number of hydropower advocates, who are key for the system, and the absence of the economic point of view in the discussion.
Wind power generation is one of the Group’s pillars
The importance of wind power has grown
As far as wind power is concerned, the year progressed as expected, with the construction work of new parks proceeding according to schedule and the production of the existing parks meeting expectations. The Metsälä wind power farm in Kristinestad, with 34 turbines, was put into commercial use at the end of 2017. After the completion of the large investment in the Metsälä wind farm, it is safe to say that turning wind power from a marginal business into one of the Group’s pillars has been successful.
An important milestone for the company is the operations centre, which started its activities in Vaasa in November. It enables EPV Energy to produce more and more specific energy balancing services for its shareholders and the companies it owns. The launching of the Operations Centre was the culmination of ten years of systematic development of operations and information systems. Of course, the development work does not end here, because we will also have to be able to meet the challenges of the ever-changing electricity market and power system in future. This will only be possible with competent, skilful employees. According to the annual survey on EPV Energy’s employees, staff satisfaction is extremely high and the turnover of employees is low. EPV Energy is also seen as an appealing employer. This is partly due to the excellent reputation of the Vaasa region in the energy sector and partly to the company’s own active and positive attitude.