CEO’s review

I started as Helen’s CEO in January 2023, at a time when the energy sector was undergoing extremely interesting changes. The share of renewable energy is growing rapidly as digital solutions and new opportunities in fields such as hydrogen and small modular nuclear reactors (SMRs) offer new ways to accelerate the green transition. We are witnessing a turning point where the old laws of consumption no longer apply and we are learning to live according to the Earth’s carrying capacity. Helen is transforming into a renewable and carbon neutral energy company. It is a revolutionary change towards a more sustainable world.

Electricity defined consumers’ lives

In 2023, the average prices of electricity and fuels decreased when compared to the previous, exceptional year and the electricity shortage anticipated for winter 2022–2023 did not take place. However, the price sensitivity in the market is higher than ever. The long sub-zero temperature period at the turn of the year 2023–2024 and the subsequent increase in electricity consumption showed that price fluctuations caused by weather-dependent production will continue to be part of the Finnish energy system.

In the future, peak consumption situations will require increasingly more flexibility. Helen’s customers took their electricity savings seriously during the year. In January 2023, our customers reduced their consumption by a staggering 15% on average, while the decrease was only 5% in Finland as a whole.

We want to encourage our customers to think about their electricity consumption as eliminating unnecessary consumption is the most effective way to ensure that society has enough electricity in all situations. To support this development, we launched new products, such as the Valtti Electricity contract, which helps our customers shift their electricity consumption to hours that make most sense from the perspective of the price and sufficiency of electricity.

Our updated strategy boosts the green transition

During 2023, we worked on our new strategy. It supports our long-term competitiveness and the green transition, which we will carry out with a special focus on flexibility and profitability.

We will implement the green transition in the short term by giving up the use of coal with the decommissioning of the Salmisaari power plant in 2025. In the medium term, we will electrify our heat production, use sustainable biomass as a transition-phase fuel and seize new growth opportunities offered by hydrogen and SMRs. In the long term, we will invest in the extensive electrification of heat production and phase out all combustion-based energy production by 2040.

The implementation of the strategy requires new capabilities in order to accelerate the development of digitalisation and new technologies. For this reason, we adopted an organisational structure based on business units that are accountable for their results and Group functions that support the business units. The new organisation and Management Group started on 1 January 2024.

We finetuned the targets of our sustainability work

In 2023, we prepared for the requirements of the EU’s Corporate Sustainability Reporting Directive by updating our sustainability programme and conducting a double materiality analysis. In the analysis, we considered both the impacts of our business operations on the environment and people and the risks and opportunities sustainability creates for our business.

As an outcome of the materiality analysis, we adopted an updated sustainability programme, which includes targets for safeguarding biodiversity, strengthening the sustainable supply chain and maintaining compliance. In particular, safeguarding biodiversity has emerged alongside climate change mitigation as a significant factor determining the future of the planet.

Our investments in a sustainable energy system yielded concrete results

As the operating environment changes, we are constantly developing more efficient ways to produce, store and recycle energy. The energy transition took concrete form when the Hanasaari power plant that served the residents of Helsinki for nearly 50 years was decommissioned in April. With the decommissioning, our coal consumption was halved and our energy production took a major leap in a greener direction. At the same time, our emissions fell by nearly 40% and those of Helsinki by approximately 20%.

In the future, we will continue to replace coal-based electricity and heat production with diverse solutions: heat pumps, electric boilers and bioenergy. By 2025, we will build more than 2,000 MW of electricity and heat capacity to replace fossil energy production.

In 2023, a concrete example of the change could be seen at the Katri Vala heat pump plant, where the seventh and last heat pump was deployed in the spring. The plant produces over 1,000 GWh of heat per year – enough to cover the majority of central Helsinki’s heating needs during the summer season.

In addition, we focused on implementing our wind power investments by having wind farms built in different parts of Finland. By 2025, the amount of our annual wind power production will exceed the amount of electricity previously produced with coal as the wind farms under construction will add almost 800 MW to our production capacity. The commissioning of the Olkiluoto 3 nuclear power plant unit, owned partly by us, in spring 2023 was an additional balancing factor in electricity production.

Despite rising costs and uncertain economic conditions in Finland, it is important to ensure that investments in a carbon neutral energy system can be implemented in a timely manner. The new supervision method for the electricity network business, which entered into force at the turn of the year 2023–2024, significantly reduces network companies’ ability to invest in electricity trans-mission connections. However, investments in increasing transmission capacity are currently at a very critical stage as society becomes reliant on electricity.

Our hydrogen and SMR projects moved forward

The year 2023 saw significant progress in our hydrogen business as the pilot plant project planned in Vuosaari moved on to the design phase. With this project, our aim is to create the necessary capabilities for large-scale Power-to-X production. In addition, we started, together with our partners, preliminary studies on the development of an industrial hydrogen valley in the Uusimaa region. The joint project is a step forward in driving Finland towards becoming a leading hydrogen economy in Europe.

SMR-based energy production also took a concrete step forward when we signed a related Letter of Intent. Its aim is to enable an investment in a small-scale nuclear power plant for heat production. SMRs are one of the most promising solutions for rapidly and cost-efficiently reducing the emissions of energy production and balancing the production and price fluctuations caused by the increasing amount of wind power. In practice, the construction of small modular nuclear reactors still requires legislative reforms. I hope that the Finnish government’s commit-ment to the deployment of heat-producing SMRs will take concrete form as a legislative proposal.

Our skilled personnel enables the energy transition

Building a sustainable energy system requires a new mindset not only from decision-makers but also from energy companies. At Helen, we have continued to develop our organisation and capabilities.

Despite the slowdown in economic growth and uncer-tainties in the operating environment, we have maintained our course and made significant progress on our path towards carbon neutrality. Without our skilled and ambi-tious employees, the green transition of the energy sector would remain just a dream. We will turn it into reality.