The new EU strategy boosts the internal energy market

Fortum Oyj
Press release
10 November 2010

The new EU strategy boosts the internal energy market

Fortum welcomes the new EU energy strategy (Energy 2020 - A Strategy for
competitive, sustainable and secure energy), which was adopted today by the
European Commission. The new strategy reflects the Commission's determination
to use the extended mandate that the EU has had in energy policy since the
adoption of the Lisbon Treaty last year.

The new strategy outlines EU's energy policy for the next nine years and
highlights the importance of a well-functioning internal energy market in
securing a competitive, sustainable and secure energy supply for European
companies and citizens. A single, EU-wide internal energy market is also a
precondition for using a single voice in the EU's external energy relations
with third countries.

“Fortum supports the view that a well-functioning and integrated electricity
market is essential for reaching the established targets for the use of
renewable energy and achieving efficiency gains. It is also crucial for
realising the necessary investments in production and transmission capacity,
which are calculated to be approximately EUR 1 trillion by 2020,” says Anne
Brunila, Executive Vice President, Corporate Relations and Sustainability at

Focus on transmission capacity and harmonising support schemes for renewable

As the internal market cannot function without sufficient cross-border and
regional transmission capacity, the Commission has a strong emphasis in getting
the still missing infrastructure in place. Furthermore, the Commission plans to
develop new financing instruments to guarantee the necessary funding for
selected cross-border projects of strategic importance. Fortum supports this
development and also shares the EU's view that permitting procedures for new
transmission lines should be speedy and addressed at a European level.

The new transmission lines integrate energy markets and thus also create a need
for energy policy harmonisation between the EU Member States. Therefore, among
other things, the Commission intends to assess the renewable energy directive
and its impacts already in 2011. In Fortum's opinion, also the harmonisation of
national support schemes for renewable energy should be reviewed at the same

“An EU-wide support scheme would ensure that renewable-based generation is
built where it is the most cost-efficient. For example,
Eurelectric has estimated that through harmonisation of national support
schemes for renewable energy the EU Member States could save altogether EUR 17
billion yearly,” Anne Brunila continues.

Technology development a priority

The new strategy takes a stand on technology development through the European
Strategic Energy Technology Plan (SET-Plan). The SET-Plan covers the
development of the main technology solutions needed to move towards a
low-carbon society and therefore its implementation and financing is a
priority. Energy efficiency and the potential of the smart grids as well as the
electricity in transportation are highly important topics in the new strategy.
The strategy also calls for a substantial increase in the uptake of combined
heat and power (CHP) production, and district heating and cooling. Fortum
supports this ambition to increase CHP production that commonly has a fuel
efficiency of over 90%. The untapped potential to achieve energy savings on an
EU level is thus enormous.

Fortum Corporation
Corporate Communications

Additional information:
Esa Hyvärinen, Vice President, Public Affairs, tel. +358 40 826 26