Fortum's CEO Tapio Kuula: Strong leadership needed to build European Energy Markets


"EU Commission should take a strong leadership to bring member states back on
track to reach fully functioning internal energy market by 2014 as decided last
year. Regarding the EU decarbonisation strategy, the focus should be on setting
ambitious CO2 targets for 2030. That would give a very positive signal to the
CO2 market and be a strong incentive for low-carbon investments", said Fortum's
President and CEO Tapio Kuula at Eurelectric Annual Conference in Malta today.

European leaders decided last year that fully functioning internal energy
market should be in place by 2014.

"European Member States are, however, developing national strategies and
mechanisms, which compromise rather than support the target", Mr. Kuula said
referring to the recent development of so-called capacity remuneration
mechanisms in several Member States. National mechanisms threaten the
functioning of the internal energy market.

Mr. Kuula highlighted the importance of putting agreed decisions into effect.
Cost-effective transition towards low-carbon energy future is possible with
well functioning markets and better cross-border transmission infrastructure.
In the long term this will benefit energy consumers, producers and the society
as a whole.

Referring to debate ongoing on the EU's post-2020 energy and climate policy
targets, Mr. Kuula said that "CO2 reduction should be the central target and
driver for the post-2020 policy framework. Other targets, if needed at all,
must be seen in relation to that and focus on eliminating the obstacles faced
by e.g. renewable energy sources and energy efficiency. As we have learned,
overlapping targets and measures tend to water down the effectiveness of each
other and should be avoided in the future."

Investment decisions in the energy sector have long-term implications.
Strategic planning is getting more and more difficult as overlapping EU
steering mechanisms together with national and even retroactive changes to the
existing support schemes increase regulatory and political uncertainty. In
addition, governments are innovating new energy related tax measures to balance
their budgets by establishing incentives that contradict with energy and
climate policy targets and create distortions in the market.

"Investment environment has become very challenging at a time when massive
investments - which create growth and jobs - both in low-carbon energy
generation and transmission infrastructure are needed", Mr Kuula concluded.

Fortum Corporation
Corporate Communications

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Fortum's purpose is to create energy that improves life for present and future
generations. We provide sustainable solutions that fulfil the needs for low
emissions, resource efficiency and energy security, and deliver excellent value
to our shareholders. Our activities cover the generation, distribution and
sales of electricity and heat as well as related expert services.

Fortum's operations focus on the Nordic countries, Russia, Poland and the
Baltics. In the future, the integrating European and fast-growing Asian energy
markets provide additional growth opportunities. In 2011, Fortum’s sales
totalled EUR 6.2 billion and comparable operating profit was EUR 1.8 billion.
We employ approximately 10,800 people. Fortum’s shares are quoted on NASDAQ OMX

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