Our energy production is mainly based on carbon dioxide-free hydro and nuclear power, and on energy-efficient combined heat and power. In recent years we have also increased wind and solar power production in, e.g., the Nordic countries and Russia. Our carbon footprint (gCO2/kWh) is one of the smallest among European energy companies.
Coal’s share in electricity production in 2018 was 3% and in heat production 16%.
Of our total electricity production in 2018, 57% was carbon dioxide-free and 28% was produced with renewable energy sources. Of our heat production, 9% was produced with renewable, carbon dioxide-neutral energy sources. In Europe 96% of our electricity production was carbon dioxide-free.
Further information about fuel use by country is available on page 30 and 62 of our Sustainability Report.
Responsible fuel procurement
Where we use coal, we do so efficiently and responsibly. Coal used in Finland originates from Russia. In Poland we use mainly Polish coal. Russian power plants use coal originating from Russia and Kazakhstan. We purchase virtually all coal directly from mining companies. Fortum’s most significant coal suppliers in 2018 were SUEK, Maikuben-Komir, Polska Grupa Górnicza, Kaproben and Kuzbassrazrezugol (KRU). The share of coal coming from unknown origins via intermediaries was 0.1% of the coal we purchased in 2018.
Fortum is a member of the Bettercoal initiative and uses the Bettercoal Code and tools in monitoring the responsibility of the coal supply chain. Fortum’s most significant Russian suppliers have already been assessed against Bettercoal Code, and a Bettercoal assessment was performed at our supplier’s mines in Kazakhstan in 2019. All coal suppliers participating in the Bettercoal initiative and their status in the assessment process are listed on Bettercoal’s website. In 2018 we purchased 54% of coal from suppliers whose mines have been subjected to a Bettercoal assessment. We are committed to increasing this share to 70 per cent by the end of 2020.
Advanced combustion technology
In addition to carbon dioxide emissions, fuel use also generates sulphur oxide, nitrogen oxide and particle emissions, which weaken air quality and cause acidification of soil and water systems. Flue gases can be reduced efficiently by using various flue-gas cleaning technologies and combustion technology solutions. All our power plants operate in compliance with environmental permit conditions. We also supply other energy companies with combustion technology solutions designed to reduce nitrogen oxides.
Fortum’s coal use in Finland
The Suomenoja combined heat and power (CHP) plant in Espoo currently uses coal and natural gas for fuel, but Fortum will discontinue the coal use in Espoo in 2025. Fortum and the City of Espoo have committed to develop Espoo district heating system to be carbon-neutral during the 2020's in Espoo Clean Heat project. As the new bio-heating facility in Kivenlahti is commissioned, it will replace the old coal-fired unit in Suomenoja. To replace the remaining coal production, we are pursuing new solutions – from utilising the waste heat of data centres, wastewater and industry to electric heat pumps, geothermal, smart demand-response solutions, and bioenergy.
The Meri-Pori condensing power plant produces electricity mainly during peak consumption periods. A 308-MW share of the Meri-Pori power plant has been part of the Energy Authority’s peak-load reserve capacity since July 2017, and the agreement ends in June 2020.
Fortum’s coal use in Russia
In Russia the Chelyabinsk combined heat and power plant CHP-2 uses natural gas and coal, and the Argayash combined heat and power plant uses coal.
Fortum’s coal use in Poland
In Poland coal is used at the Czestochowa combined heat and power plant and in the connecting heat plants, the Zabrze combined heat and power plants and the adjacent heat plants, and the Bytom combined heat and power plant, which is currently used as a reserve power plant. The Czestochowa plant also uses biofuels, and the new Zabrze plant uses coal and refuse-derived fuel, RDF.
Fortum’s Uniper investment and discontinuing coal use
Fortum’s nearly four-billion-euro investment in Uniper was one of the most significant energy sector M&As in Europe in 2018. In 2019 Fortum announced its intention to acquire the majority shareholding in Uniper. Upon finalisation of the transaction, Fortum’s share of Uniper will increase to over 70.5% and Fortum’s total value of the Uniper investment to about 6.2 billion euros. The biggest concerns the various stakeholders have raised about the transaction have been the strategic fit of Uniper’s fossil-based production with Fortum’s low-carbon assets and its impact on Fortum’s carbon footprint.
Fortum and Uniper have a strategic mix of assets – both clean and secure – as well as the expertise required to successfully drive the transition towards a low-carbon energy system.
Fortum supports the EU’s climate target of a carbon-neutral EU by 2050, and we, along with other Nordic energy companies, have encouraged the European Commission to have a more ambitious policy to achieve the goal. We invested in Uniper in spite of coal power, not because of it. We believe that a well-functioning, market-based emissions trading system is the best way, in terms of security of supply, to implement the transition to a low-carbon energy system at the lowest cost to society.
As a responsible and committed parent company, Fortum intends to work with Uniper’s management team and employees on the creation and implementation of a joint vision. In the rapidly changing and decarbonising European energy sector, the vision must be centred around the three cornerstones of sustainability, affordability and security of supply.