Fortum and St1 to start a pilot project for geothermal heat production in Espoo

PRESS RELEASE 28 November 2014

Energy companies Fortum and St1 will start collaboration with the goal to build
Finland’s first industrial-scale geothermal pilot heat plant. St1 will begin
planning the pilot production plant, which is estimated to be completed in
2016. A construction site for St1’s geothermal production plant is being sought
out in the area where Fortum’s Otaniemi or Kivenlahti heat plants are located,
and Fortum will buy the heat energy produced by the plant for Espoo’s district
heating network.

The geothermal heat plant is estimated to have a production capacity of up to
40 megawatts of geothermal heat energy. With that output, Fortum can cover as
much as 10% of the district heat needs in the Espoo region. Because no fuels
are used in geothermal heat production, the plant will not generate any
emissions into the atmosphere.

Geothermal energy is produced by drilling two holes several kilometres deep
into the ground. Water is fed into one of the holes. As the water heats up in
the ground, it rises through the other hole. At the heat plant, the heated
water goes through a heat exchanger and then into the district heating network.
The water becomes so warm in the process that it can be used directly in
district heat production without any heat pumps.

“Our goal is to reduce emissions caused by district heating. Geothermal heat is
emissions-free energy that hasn’t yet been utilised in Finland on this scale.
It increases heat production flexibility and reduces emissions in the Espoo
region. This is also a new field for us, and we are anxiously waiting to start
the drilling,” says Fortum’s Jouni Haikarainen, Vice President, Heat Finland
and Baltics.

“Geothermal heat is a very interesting alternative for emissions-free heat
production. In line with our strategy, we are investing in this pilot project
because we believe that this method makes it possible to produce significant
amounts of energy on an industrial scale also internationally. Our company’s
broad, top expertise in the energy sector provides a solid platform for
business expansion into new areas of energy production,” says Mika Anttonen,
Chairman of St1’s Board of Directors.

An illustration of a geothermal heat plant for media use can be downloaded here:

Fortum Corporation
Corporate Communications

Further information:
Fortum Oyj, Jouni Haikarainen, Vice President, Heat Finland and Baltics, tel.
+358 40 709 5690
St1 Nordic Oy, Mika Anttonen, Chairman of the Board of Directors, tel. +358 10
557 11

Fortum’s purpose is to create energy that improves life for present and future
generations. Catering to the versatile needs of its customers, Fortum
generates, distributes and sells electricity and heat, and offers related
expert services. Fortum’s operations focus on the Nordic and Baltic countries,
Russia and Poland. In 2013, the sales of Fortum amounted to EUR 6.1 billion
with the comparable operating profit of EUR 1.6 billion. Fortum Group employs
approx. 8,800 persons. Fortum’s shares are quoted on NASDAQ OMX Helsinki.

St1 is a Finnish energy group implementing its vision to be the leading
producer and seller of CO2-aware energy. The company researches and develops
economically viable, environmentally sustainable energy solutions. St1’s energy
services and products cover everything from wind power to high-concentration
ethanol RE85 produced from biowaste and residues. St1 has bioethanol plants in
Finland, an oil refinery in Gothenburg, Sweden, as well as St1 and Shell
branded retail stations in Finland, Sweden and Norway. Headquartered in
Helsinki, the company employs currently over 550 people in Finland, Sweden and