Financial crises effects the Nordic electricity market prices

Fortum Oyj
Press release
18.11.2008

Financial crises effects the Nordic electricity market prices

During late summer global market prices for oil and coal turned down after a
lengthy increase. Also the prices for emission allowances have decreased during
the autumn. This decrease has reflected to the Nordic electricity wholesale
market prices. On the other hand, higher price level in the Continental Europe
and weakened hydro reservoir situation, have eased off this effect.

- Recent development has shown how the Nordic market is dependent on the global
financial development. The situation on the market is showing some nervousness.
There are many factors influencing the future development, anything from global
financial situation to the coldness of winter days. Even in this situation we
can experience very high prices on cold winter days, comments Lotta Forssell,
Vice President Communication from Fortum's Power Generation.

- In Finland consumer prices are increasing after the wholesale price increase
last summer. High fluctuations in wholesale prices put pressure on electricity
sales companies to react faster in consumer pricing. Fortum is examining new
pricing models for its consumer contracts, aiming at increasing the
predictability and clarify, explains customer manager Timo Liiri from Fortum
Markets.

Fortum publishes a topical energy market review two to four times a year. Topics
covered in the review include for example fuel price development, electricity
price development on the Nordic power market and factors influencing the
development.

Summary of the energy market review 18 November 2008:

- The global economic slow-down has had an impact on the fuel and electricity
prices and Fortum's way of analysing the energy situation. The economic
slow-down will also have an impact on the global energy demand - at least on a
short term.
- Fuel prices increased during 2007 and the increase continued even more
dramatically the first half of 2008. Since mid July the fuel prices have
decreased dramatically but are still above the price level of early 2007.
- After a steep increase Nordic wholesale electricity prices have decreased
during the past two months. The future price quotations are now on the same
level as before summer being around 50 €/MWh for the next year.
- The Nordic water reservoirs are slightly below the long term average, and
there is less snow compared to historical levels.
- Higher continental prices and increased transmission connections have
resulted in increased exports from Nordic to Continental Europe where the
prices are 15-25 €/MWh higher compared to Nordic.
- Consumer prices in Finland have not fully reflected to wholesale price
increase and therefore the consumer price levels are in general below the
wholesale prices.

Fortum Oyj
Corporate Communications

Further information:
Lotta Forssell, +358 50 45 36128, lotta.forssell@fortum.com
Timo Liiri, p. 050 45 36461, timo.liiri@fortum.com