EPV Energy Ltd (EPV) is a company specialised in energy procurement and it operates on an absorption costing principle. The aim is to supply the owners with competitive electricity and to ensure inexpensive power procurement in a changing operating environment. The company’s strategic objective is that the energy procurement should be both low-emission and competitive. The energy procurement is mainly transacted through the generation shares owned by the company. EPV’s acquired amount of electricity in 2017 was 3,909 GWh (4,429). This corresponds to 4.6 per cent (5.2) of the electricity consumption in Finland.


Operating environment

According to preliminary statistics, the consumption of electricity in the Nordic countries in 2017 was at a similar level to the previous year at 392 TWh (390). In 2017, Finnish electricity consumption was 85.5 TWh (85.1), which meant an increase of approximately 0.4 per cent compared to 2016. The industrial share of the consumed electricity was 47 per cent and other consumption 53 per cent. Last year, industrial consumption increased by 1.7 per cent, while consumption in other sectors decreased by 0.7 per cent. The losses stood for approximately 3.0 per cent of the electricity consumption.
In 2017, a record-breaking 23.9 per cent of power procurement was covered by imports and 76.1 per cent by domestic generation. Combined generation of power and heat (CHP) covered approximately 24.6 per cent of the consumed electricity, nuclear power 25.2, hydropower 17.1, and coal and other condensing power 3.5 per cent. The share of wind power was 5.6 per cent. The quantity of imported electricity from Sweden and Russia remained similar to the previous year. Electricity net exports to Estonia fell substantially to approximately 0.8 TWh. As a result of this change, Finnish imports of electricity increased by 8 per cent compared to the previous year, amounting to 20.4 TWh.
The snow and water reserves, i.e. the hydrological balance, of the Nordic countries remained below the long-term average for the first half of the year and above it for the second half. The fluctuations relating to hydropower generation are clearly depicted in the fact that, over the year, the hydrological balance was 13 TWh below the long-term average at its lowest and 7 TWh above the long-term average at its highest. At the beginning of the year, the reserves were 7 TWh below the average level and at the end of the year 6 TWh above the average level. By the turn of the year, Nordic water reserves were approximately 85 TWh in total.
In 2017, CO2 emissions from energy generation were 5.8 million tons, which is 16 per cent less than the previous year. The reduction in carbon dioxide emissions was mainly due to the decreased consumption of coal in the separate production of electricity. Up to 80 per cent of the electricity generated in Finland was free from CO2 emissions. The share of renewable energy sources was 47 per cent of the electricity generated, and domestic fuels covered 52 per cent.


Electricity generation in 2017 at the power plants of the partnership company Vaskiluodon Voima Oy (50%) was 1,064 GWh (1,566). A total of 759 GWh (846) of district heating was generated. On the basis of its interest, EPV acquired a total of 504 GWh (755) of electrical energy. The normal inspections and maintenance work were carried out in the annual service of the Vaasa power plant. At the Seinäjoki power plant, the low-pressure turbine and condenser were replaced, in addition to the normal work included in an annual service.

The total output of the Olkiluoto 1 and 2 power plants of the associated company Teollisuuden Voima Oyj (TVO) in 2017 was 13,415 GWh (14,348). During the year, in addition to the normal annual service, Olkiluoto 1 had one 10-day long stoppage, while repairs took place. Exceptionally, the annual service of Olkiluoto 2 took more than 2 months. Otherwise, the units worked as normal. EPV’s direct interest in Teollisuuden Voima is 6.6 per cent, and 887 GWh (984) of energy was acquired in proportion to the share. The acquisition includes the condensing power generation share from Meri-Pori.

According to information received from TVO, the fuel needed to start electricity generation at the Olkiluoto 3 power plant (OL3) is already in Olkiluoto. The 241 fuel rod bundles required for fuel loading and the four spare bundles have been inspected and transferred inside the plant. The reactor requires a total of 128 tonnes of uranium.

Hot tests are currently underway at the OL3 plant. After a successful series of such tests, OL3 will have the potential to be granted an operating licence and to proceed towards fuel loading. According to the plant supplier’s schedule, the plant unit will be connected for the first time to the national grid in December 2018 and regular electricity generation will begin in May 2019.

The partnership company Pohjolan Voima Oy (PVO) is a power procurement company which operates on an absorption costing principle, supplying electricity to its owners at cost price. EPV’s interest in Pohjolan Voima Oy is 5.5 per cent (5.5) and a total of 462 GWh (553) of electricity was acquired accordingly.

The quantity of electricity supplied by the associated company Rapid Power Oy (50%) at its hydroelectric power station in Norway was close to the long-term average. Due to technical problems with the stators in the power plant’s two generators, the regulation of the units in question was restricted for the whole year. The other two generators were available as normal. The value of production was also reduced by the transmission system operator’s construction work, which limited electricity transmission capacity from Northern Norway to other Nord Pool areas. In 2017, the total electricity supply to EPV was 613 GWh (891).

Voimapiha Oy (17%) generates hydropower electricity in Sweden. Voimapiha holds a share of 25.7 per cent in Kraftgården Ab. The hydropower plants owned by Kraftgården are located on the River Indalsälven, one of the most significant hydropower reserves in Sweden, and the company has approximately 161 MW of generation power, which corresponds to approximately 862 GWh of average annual generation. During its fourth year of operation, Voimapiha Oy supplied EPV with 295 GWh (247) of hydropower electricity generated in Sweden. The real estate tax on hydropower plants will be reduced in four stages in Sweden by 2020. The Parliament handled this issue in the autumn of 2017.

A subsidiary of EPV (100%), Tornion Voima Oy generates electricity and heat in connection with the steelworks in Tornio. Of the energy generated at the plant, CHP is supplied to EPV, district heating and fabrication steam to the Tornio steelworks and district heating to Tornion Energia Oy. The total electricity supply for EPV was 167 GWh (156).

Raahen Voima Oy is EPV’s partnership company (25%), which generates electricity and heat by the Raahe steelworks. Of the energy generated at the plant, CHP is supplied to EPV, electricity, district heat and process steam to Raahe steelworks and district heat to Raahen Energia Oy. EPV became a shareholder and supplies to it began on 1 April 2014, and the company’s new CHP power plant was adopted in the summer of 2016. The company’s operations are now well established and have lived up to expectations. In 2017, the total electricity supply for EPV was 148 GWh (136).

EPV Tuulivoima Oy (100%) focuses on building wind power farms and generating wind electricity in the coastal areas of Ostrobothnia and inland. EPV Tuulivoima’s first wind power farm with its 16 turbines has been in operation in the Torkkola village in Vaasa since the beginning of 2015. The company’s second wind power farm with 17 turbines began operation in Santavuori, Ilmajoki in the summer of 2016. In addition, a third wind power farm has just been completed in Metsälä, Kristinestad. This 34-turbine farm began its operations at the beginning of 2018. Similarly, the 2-turbine wind power farm in Paskoonharju, Teuva began generating electricity at the end of 2017. Vestas supplied the turbines for the Metsälä and Paskoonharju wind power farms, and the investments are estimated at a total value of MEUR 200. Additionally, EPV Tuulivoima holds a considerable number of legally valid building permits and the company is currently waiting to learn about the forthcoming subsidy scheme before making any decisions about them. In 2017, the total electricity supply for EPV was 350 GWh (245).

The eighth year of generation for the Puuska wind power farm of Rajakiiri Oy (65.1%), located in Tornio, was slightly lower in output than the average year. At the same time, the better wind conditions than the previous year and the second full year of generation for the company’s newer wind farm (Puuska 2) resulted in a new gross production record. The total electricity generation of the company was 123 GWh (115), of which 78 GWh (72) were supplied to EPV.

Suomen Merituuli Oy is an associated company, the objective of which is to build future offshore wind power plants in the Gulf of Finland and the Sea of Bothnia. The company has development projects for offshore wind power in the Ingå and Sideby areas. EPV’s interest in the company is 50 per cent.

Regional grid company

The subsidiary EPV Alueverkko Oy (100%) practices electricity transmission and network operations mainly in the power transmission network rented from its parent company. The amount of energy transmitted for consumption via EPA’s transmission network in 2017 was 6,815 GWh (7,120), slightly less than the previous year. Several new network projects were completed during the year, and network transmission losses (8.7 GWh) decreased from the previous year.

The completed financial year was the second year of the Energy Market Authority’s fourth regulatory period for network operations (2016–2019). Underperformance in 2016 was EUR 25,000 and, according to a preliminary calculation, in 2017 it was approximately EUR 400,000. The cumulative underperformance for the previous and current regulatory period is approximately MEUR 2.

Other companies

EPV Energy Ltd’s subsidiary Suomen Energiavarat Oy was founded for the purpose of, as a shareholder in Vapo Oy, developing Vapo’s operations with the strategic goal to increase the ownership value, and to primarily aim the resources at the generation of domestic fuels and the development of new uses for peat.

The purpose of EPV Bioturve Oy (100%) is to acquire land areas suitable for peat production in the regions of Ostrobothnia and South Ostrobothnia and to prepare these areas for peat production. Production at the Vähäneva site in Laihia has proceeded according to plan and the preparation of the marsh in Hangasneva, Seinäjoki has continued. When ready, the production area will total approximately 280 hectares. During the last accounting period, the company has also actively acquired bioenergy within its operating area.

The purpose of EPV Tase Oy (100%) is to provide balance-related services for EPV’s owners and the generation companies owned, entirely or partly, by EPV. The company’s operations during the accounting period lived up to expectations.

EPV Teollisuusverkot Oy (90%) manages the transmission operations of the 110 kV high-voltage power lines in Röyttä, Tornio. EPV Alueverkko Oy manages the operative activities of the network.

EPV Tuotantoverkot Oy (100%) is an electricity network company (formerly known as PVO-Alueverkot Oy) acquired by EPV Energy Ltd from the Pohjolan Voima Group in 2017. EPV Tuotantoverkot Oy controls the 110 kV high-voltage distribution network and power stations located mainly between Pohjolan Voima’s hydroelectric power stations and the main grid in Northern Finland and the Satakunta region. Customers in this business area are distribution, industrial and production companies. In 2017, the energy transmitted for consumption via the company’s transmission network amounted to 200 GWh and the energy for production was 606 GWh.

The completed financial year was the second year of the Energy Market Authority’s fourth regulatory period for network operations (2016–2019). The former PVO-Alueverkot Oy’s underperformance in 2016 was EUR 950,000 and it will be at approximately the same level in 2017, according to a preliminary prognosis. The cumulative underperformance for the previous and current regulatory period is approximately MEUR 5.

The subsidiary Vaskiluodon Teollisuuskiinteistöt Oy operates in the rental of industrial, office and storage facilities. The facilities are located in a reserve area for power generation.

Manga LNG Oy (5%) was established in 2013. The long-term purpose of the company is to deliver competitive liquefied natural gas to its shareholders. The decision to invest in constructing an LNG terminal in Tornio was made in December 2014 and the first LNG delivery was received in November 2017. The construction of the terminal has proceeded as planned and gas deliveries to shareholders are estimated to commence in the summer of 2018.


The turnover of the EPV Energy Group was MEUR 265.2 (270.7). The turnover share of the electricity sales was MEUR 182.1 (188.4) and of the remaining operations MEUR 83.2 (82.2). The reduction in turnover is a result of the low utilisation rate of the electricity generation capacity.

The business result of the Group was profitable by MEUR 17.7 (8.4). The net financing costs of the financial year were MEUR 4.3 (4.7). According to the financial statement, the profit was MEUR 10.3 (1.6).

EPV Energy Ltd operates according to the absorption costing principle. The shareholders pay for the variable costs according to the supplied amounts of energy and for the fixed costs in relation to their holdings, regardless of whether the power share has been utilised or not. Due to this operational principle, presenting economic indexes is irrelevant for understanding the operations, the financial position or the result.


The grand total of the Group’s balance increased to MEUR 797.2 (719.8). Non-current liabilities were MEUR 313.2 (280.7) and current liabilities MEUR 102.7 (71.7). By the end of the year, the solvency ratio of the Group was 45.7 per cent (49.1), which means that the target level set by the company was achieved.

The liquidity of the Group was good all year. By the end of the year, there was a total of MEUR 50.7 (71.2) in liquid assets and investments. The unused stand-by credit amounted to more than MEUR 80 by the end of the year.

The total net investments of the Group were MEUR 122.8 (54.6). The investments in tangible and intangible assets amounted to MEUR 114.8. The acquisitions of shares were MEUR 2.7. The investments were funded by taking out MEUR 60.9 in long-term loans and through share issues of MEUR 6.4.

The interest rate risk has been hedged through interest rate swap agreements. Further information on derivatives is available in the notes.



Shareholders’ interests at the end of 2017 were as follows:

2017 (%)2016 (%)
Alajärven Sähkö Oy1,411,39
Helen Oy6,276,45
Imatran Seudun Sähkö Oy0,370,35
Jylhän Sähköosuuskunta4,084,07
Järviseudun Sähkövoiman Kuntayhtymä1,691,68
Kaakon Energia Oy0,380,37
KSS Energia Oy0,660,62
Kumera Oy0,320,31
Kymppivoima Oy8,918,83
Lahti Energia Oy8,738,42
Lehtimäen Sähkö Oy0,570,57
Oulun Energia Oy2,001,63
Outokumpu Oyj1,421,47
Oy Perhonjoki Ab1,781,78
Rauman Energia Oy0,920,85
Seinäjoen Energia Oy10,5610,55
Vaasan Sähkö Oy40,5841,35
Vantaan Energia Oy8,348,32
Vimpelin Voima Oy0,480,48
Äänekosken Energia Oy0,530,51

General Shareholders’ Meetings

The Ordinary General Shareholders’ Meeting of 2017 was assembled on 31 March 2017. The issues belonging to the Ordinary General Meeting were discussed.

Board of Directors

In 2017, the Ordinary Members of the Board elected in the Ordinary General Meeting were Juha Häkkinen, Miapetra Kumpula-Natri, Hannu Linna, Pekka Manninen, Mikko Rajala, Jorma Rasinmäki, Anders Renvall, Joakim Strand, Markku Vartia and Jukka Ylitalo.

The Deputy Members of the Board were Olli Arola, Martti Haapamäki, Ahti Källi, Jari Lepistö and Janne Rouvinen.

The Chairman of the Board was Miapetra Kumpula-Natri and the Vice Chairman was Pekka Manninen.


The CEO was Rami Vuola (MSc).


In the General Meeting, the audit firm Ernst & Young Oy was elected Ordinary Auditors for the period until the Ordinary General Meeting in 2018, with Mikko Rytilahti (CA) and Tatu Huhtala (CA) as main responsible Auditors and Anders Svennas (CA) and Kristian Berg (CA) as Vice Auditors.


The central responsibilities of the personnel include power procurement and the efficient management of power plant and network operational assets. The objective is to create added value for the company’s shareholders by governing the assets and supervising the operational entities connected to these.

Over the year, the average number of Group employees was 71 (70). At the end of 2017, EPV Energy had 43 (45) employees, EPV Alueverkko 3 (3) and Tornion Voima Oy 22 (22) employees. At the end of 2017, of the Group’s total personnel, 53 were officials and 17 employees.

As the number of employees has grown over the years, the company has paid more and more attention to job satisfaction and working capacity. Various events on this theme have been arranged in collaboration, for example, with the company’s occupational health service provider and pension insurance company. The objective is to maintain employees’ mental and physical well-being and thus to promote their ability to perform their tasks at work.


The district court is currently hearing a right-of-use dispute concerning the 400 kV transmission network leased to EPV Tuotantoverkot Oy. The power line in question is not of essential importance to the company’s operations and a settlement between the parties is expected to be reached.


After the end of the financial year in February, EPV’s subsidiaries carried out an asset deal, whereby the newly-founded Seinäjoen Voima Oy purchased from Vaskiluodon Voima the buildings and plot where the Seinäjoki power plant is located, as well as the machinery and equipment there. In another transaction, EPV Bioturve Oy bought Vaskiluodon Voima Oy’s entire peat production and the land used for it, totalling approximately 3,800 hectares. The change of owner came into effect on 1 March 2018.

The company is unaware of any other significant events following the financial year which it has failed to mention in the annual report.


According to the information shared by Teollisuuden Voima Oyj (TVO), the company has received a final and binding transitional arbitration award in the ongoing arbitration proceedings, which conform to the rules of the International Court of Arbitration (ICC), concerning the delay of the Olkiluoto 3 EPR nuclear power project and the resulting costs.

In this transitional arbitration award, the arbitration court considered the subject of the implementation of building work and project management in connection with the OL3 EPR project. This includes some of the key facts on which TVO bases its main claims against the plant supplier, as well as certain issues on which the plant supplier’s claims against TVO are based. The transitional arbitration resolves finally in TVO’s favour many issues concerning the implementation of construction work and is clearly postponing many of the issues raised by TVO on the plant supplier’s project management until the next arbitration award.

This is the third significant, final and binding transitional arbitration award given by the court of arbitration. The arbitration proceedings are not yet finished but will continue until the final award, in which the court of arbitration will determine the parties’ liability to payment of compensation.

The generation of EPV is divided into different forms of production, the purpose of which is to minimise the risks connected to individual production forms. The company is unaware of any other exceptional risks concerning its operations.


The company’s most crucial task is to ensure that the electricity supplied to its shareholders remains competitive. This requires a continuous follow-up of the operating environment and influencing the development of existing generation resources. In addition, the company must maintain its capacity to make new investments, should the operating environment change.

The crucial factors influencing the development of electricity prices in the Nordic countries are the balance between demand and supply, the price levels for fuels and CO2 emission rights, and the water resource situation. At the beginning of February 2018, the hydrological reserves of the Nordic countries were approximately 6 TWh above the long-term average and 13 TWh above the level for this period in 2017. The market price of emission rights for 2018 was about EUR 9 per ton of carbon dioxide. At the same time, the average electricity price on the derivatives market for the rest of 2018 was approximately EUR 28 per megawatt-hour and for 2019 approximately EUR 26 per megawatt-hour. The regional price in Finland was respectively EUR 35 and 32 per megawatt-hour. The forward price of coal for the rest of 2018 was approximately USD 81 per ton.

EPV’s investments which have progressed to the implementation phase include the wind power programme in Metsälä, Kristinestad and Paskoonharju, Teuva, which started commercial generation on 1 January 2018. The right to a 12-year feed-in tariff began early in 2018 at both wind farms. The Parliament of Finland is currently hearing the government’s proposal on a new support system for renewable energy, which will influence the investment decisions of future wind power projects.

The demand for electric power during consumption peaks will remain high over the next few years. Due to these consumption peaks and the running down of condensing capacity, the probability of restrictions on electricity consumption has grown. The worst case scenario is that the remaining condensing capacity is taken off the market due to the current system, endangering the existence of the entire peak load capacity system. It is fairly clear that, over the next few years, it will not be possible to improve the situation by constructing new power plants or transmission connections. A prerequisite for a functional electricity market is that there is a functional peak load capacity system in Finland, which can ensure that there is sufficient electrical power available during consumption peaks. Over the last winter, it has become evident that the problems with power and reserve capacity are starting to show on the market.

The current electricity market is based on a time when the crucial objective of large, centralised power plants, running mainly on fossil fuels, was to generate electricity in a limited area, typically within an EU member state, for both households and businesses. The market is now moving fast towards decentralised generation. This may increase the number of producers in the sector and shift the current market balance. The electricity market needs to adapt to this new system, which will integrate all parties on the market, also where elasticity of demand, energy service businesses and renewable energy sources are concerned. In light of these developments, it is plain to see that the legal and fiscal environment of the energy sector in the Nordic countries has increased the risks for electricity companies.


The distributable equity of the parent company amounts to EUR 214,526,223.57, of which the profit or loss for the financial year is EUR 807.285,71. The Board of Directors proposes to the General Shareholders’ Meeting that no dividends are to be paid.