The Electricity Solutions and Distribution Division is responsible for Fortum’s electricity sales and distribution activities. The division consists of two business areas: Distribution and Electricity Sales.
Fortum’s Distribution business area owns, operates and develops local and regional distribution networks and is responsible for the safe supply of electricity with 99.98% reliability to a total of 1.6 million customers in Finland, Sweden, Norway, and Estonia. Distribution's long-term focus is to be the enabler of the future energy system. Since electricity distribution is a regulated business, the shaping of the regulatory frameworks on a Nordic and European level is important for the future development of the network. Fortum Distribution participates actively in shaping the regulatory framework.
Strong financial result in 2010
The Distribution business area's comparable operating profit in 2010 was EUR 307 million (2009: 262). The improvement was primarily due to increased sales as a result of colder weather, which was partly offset by higher variable maintenance and fault repair costs. A stronger Swedish krona also affected the comparable operating profit positively by approximately EUR 20 million.
In 2010, the total volume of electricity distributed in local and regional grids amounted to 27.9 terawatt-hours (TWh) (2009: 25.9) and 17.6 TWh (2009: 16.4), respectively. Electricity distributed through the regional grids totalled 14.8 TWh (2009: 13.6) in Sweden and 2.8 TWh (2009: 2.8) in Finland.
Reliable electricity supply is top priority
In order to maintain and further improve reliability and quality of electricity supply to our customers, Distribution continuously invests in its electricity network. In 2010, investments totalled EUR 213 million. Also the installations of smart metering for all customers in Finland started in 2010.
Fortum is one of the leading electricity sales companies in the Nordic region. The business area Electricity Sales markets and sells electricity to Fortum’s 1.2 million private and business customers as well as to other electricity retailers in Sweden, Finland and Norway.
The goal of Fortum is to become the preferred electricity supplier in the Nordic market. Electricity Sales offers products that satisfy the customers’ demands and adds value through excellent customer service.
A competitive market
Electricity Sales buys its electricity through the Nordic power exchange. In 2010, Electricity Sales sold in total 29.8 terawatt-hours (TWh) (2009: 30.0) of electricity. Demand increased during the year due to the general economic recovery and colder than normal weather. The efficiency program of Electricity Sales was expanded during the year and unprofitable products were phased out leading to a decrease in sales volumes as of last quarter 2010. Electricity Sales’ comparable result for 2010 was EUR 11 million (2009: 22). Colder than normal weather conditions and the low hydrological situation that drove the market spot prices significantly up, were the main reasons for the lower sales margins. This, combined with the price peaks during the first quarter of 2010, affected the results.
Increased demand for green electricity
More and more private customers and companies demand that the electricity they buy is comes with a guarantee of origin i.e., information about how the electricity is produced. Demand for origin-certified electricity has become a competitive advantage for Fortum, which is the leading seller of eco-labeled and CO2-free electricity in the Nordic region.
New possibilities for smarter use of energy
Smart meters and smart grids will change the electricity market in the years to come. Electricity retailers will be able to offer customers completely new services. During 2010, Fortum launched a first service of this type, Fortum’s Energy Display, which enables the customers to track their consumption in real time.