EU-level recognition for goal-directed development of energy efficiency
Good results for the financial year in line with forecast
Helsingin Energia received significant international recognition when the European Parliament's Committee of the Regions selected it as winner of the European Regional Champion Awards competition. According to the rationale for the award, the company is a world leader in energy efficiency. Thus, our trigeneration - producing electricity, heat and cooling with the same fuel at the highest efficiency rate in the world - received the supreme award in the EU.
Helsingin Energia was also acknowledged by another prestigious expert, the International Energy Agency IEA. In its independent country-specific review, IEA commends the high efficiency of Helsingin Energia's large-scale energy production.
The year 2008 was certainly a year for awards and recognition for Helsingin Energia. You can read all about our national and international distinctions and awards in this annual review.
The recognition given for our production methods is a result of persistent and goal-directed development of energy efficiency, which we are continuing further. In 2008, we studied and developed the possibilities of using renewable energy in the fields of both wind power and co-combustion of biomass. We also raised the efficiency of our current production further in terms of both hydro power and heating power.
Helsingin Energia joined the operations of the Finnish strategic centre for science, technology and innovation, CLEEN Oy, to promote the development of new production methods and carbon dioxide capture technologies. We are also involved in the development of smart grids.
Helsingin Energia's emissions were at the lowest level for decades, and our carbon dioxide emissions fell by a sixth from the previous year. Our carbon dioxide emissions have fallen by a third since 2006. This excellent trend is an indication of energy efficiency and correct production measures.
Efficient use of energy is a key element of energy efficiency. In this sector, we continued our nationwide, impartial service in our Energy Advisory Centre, and opened a new, interactive energianeuvoja.fi web service in co-operation with WWF Finland and Motiva. The web service was publicised with a nationwide Green Fingerprint campaign, which stirred citizens to think about their own energy behaviour.
Economic uncertainty reflected in the energy market
The general economic situation deteriorated dramatically in Finland towards the end of the year, when the credit crisis expanded to the real economy. The economic situation was reflected in the energy market in the form of high uncertainty. One indication of this was the fact that price levels took a downward turn in the autumn.
Despite the prevailing economic situation, Helsingin Energia's result was good and in line with our estimates. Our successful operations in the electricity market contributed to the result. Helsingin Energia's actions in the highly volatile wholesale market were correctly measured. On the other hand, in the retail sale of electricity, we succeeded in the household customer sector in terms of both sales volume and the number of customers
District heat has steadily increased its customer numbers along with urban construction. Heat sales diminished somewhat last year due to the mild weather, and the amount of co-generation also fell.
District cooling expanded further to new areas in Helsinki, steadily increasing its market share in the capital.
Helen Group's profitability at a high level
At EUR 283 million, Helen Group's result improved slightly on the previous year. This can be regarded as a good result under the circumstances. Group profitability fell slightly, however, remaining at a level that will safeguard the investments required by business development. Balance sheet strengthened further, and the equity ratio increased to 63%. Cash flow from operating activities, EUR 265 million, remained at the previous year's level. Liquidity diminished by EUR 71 million, nevertheless, remaining at a good level.
In terms of our subsidiaries and associated companies, Oy Mankala Ab and Kemijoki Oy planned and implemented significant projects in efficiency and power upgrades. Teollisuuden Voima Oyj continued to perform safe, high-standard production expertise, despite a delay in the Olkiluoto 3 project.
We established a joint venture, Suomen Merituuli Oy, with Etelä-Pohjanmaan Voima Oy. Through the joint venture, we will significantly increase wind power production in Finland. The company began operations promptly: it made area reservations in the autumn in order to build a wind farm of a significant size on the coast of the Gulf of Finland and the Gulf of Bothnia. Environmental impact assessments are being prepared in these areas, and wind power production will probably start in 2012-2014.
Investment projects were on schedule
The project on the Hanasaari energy supply area proceeded as planned. Demolition of the decommissioned Hanasaari A power plant was implemented on schedule, exercising the utmost care. In the demolition of the power plant, the material recycling rate exceeded 90%, which can be regarded as excellent. The development of the area will continue this year as a sub-project, including the building of coal silos.
Construction of the Hanasaari peak-load and reserve heating plant progressed on schedule. The heating plant, which will assure heat supplies to the main city, will be ready for use in the heating season of 2009-2010.
Our network of tunnels was expanded further in order to ensure reliable and secure energy transmission.
Helen Sähköverkko Oy, which is responsible for the electricity network services in the Helsinki region, launched a remote reading project in the city centre. As a result, 120,000 places of electricity use will be brought within the scope of remote reading by 2011. Mitox Oy is responsible for the operation of the reading system, and it will also install a considerable number of the meters.
Outlook for 2009
Economic uncertainty and the deterioration of the general outlook are reflecting exceptionally strongly on the current year. The impact of the crisis in the financial markets on the real economy increases the uncertainty of forecasts. However, it can be estimated that the Group's result in 2009 will not reach the same level as in 2008.
Climate change mitigation is the most demanding challenge in our operating environment, requiring actions at all levels of the energy chain. For Helsingin Energia, policies on increased utilisation of renewable energy, and the use of carbon dioxide emisson-free and low-emission energy sources will bring significant investment needs in the next few years.
At Helsingin Energia and in the entire Helen Group, continuity of expertise and long-term information management plays an increasingly important role. The peak yers of retirement continue, and it will be all the more essential to retain and develop our know-how within the Group. Preparation for the sometimes rapidly-changing challenges in the energy sector requires both expertise and innovation.
We will continue our operations in line with sustainable development, promoting energy efficiency and complying with our renewable energy development programme. We will also develop efficient use of energy in accordance with the energy efficiency agreements.
I wish to express my thanks to the personnel of the Helen Group for the excellent result for 2008, which we achieved under challenging conditions through our goal-oriented and cost-effective operations.
Helsinki, 11 February 2009
Seppo Ruohonen
