Press release

New unit inaugurated at Fortum's Tyumen power plant in Russia

21 December 2010, 10:59 EET

A new unit was inaugurated today at Fortum's combined heat and power (CHP) plant Tyumen CHP-1 in the city of Tyumen in Western Siberia. The new unit is the first of seven units in Fortum's extensive investment programme in Russia; the unit will begin commercial operation during the first half of next year.

The new unit is natural gas-fired, combined-cycle gas turbine plant. It has a production capacity of 230 megawatts (MW) electricity and 293 MW heat. The unit will boost the plant’s total electricity production capacity to 662 MW and its heat production capacity to 1,640 MW. As part of the Russian investment programme, two more units, each with an electricity production capacity of 225 MW, will be constructed for the Tyumen CHP-1 plant. They are estimated to be completed in 2014.

The new unit provides clear environmental benefits

Combined-cycle gas turbine plants represent the best available technology in gas-fired power production.The energy efficiency of the new unit is over 85% while the efficiency of the existing units is approximately 60%. Compared with the current energy production in the Tyumen area, carbon dioxide emissions will reduce by 400 000 tonnes annually.

”This is a very significant day for us, as we inaugurated the first unit of our investment programme. It will add new production capacity needed by West Siberia’s gas and oil industry and will help us improve the efficiency of our energy production in Tyumen,” says Fortum’s President and CEO Tapio Kuula. ”We will continue to build new capacity in the Ural and West Siberia regions through our extensive investment programme. Russia is an important home market for Fortum, and we want to participate in the development of the power and heat markets together with our Russian partners,” he summarizes.

Russia's first modern heat measurement system installed in Tyumen

Upgrading the district heat networks and improving the efficiency of heat distribution is also a key component in improving energy efficiency in Russia. In conjunction with the inauguration of the new unit, the first equipment measuring the district heat feed and consumption was installed in Tyumen between the trunk network owned by OAO Fortum and the city’s distribution network. Utilizing GPRS-data transfer, it is the first digitalised heat measurement system in Russia. During 2011, there will be 159 similar units installed in the city. These units will enable Fortum to pinpoint heat distribution problem spots and thus reduce heat losses.

Fortum Corporation
Corporate Communications

Additional information:
Anne Brunila, Executive Vice President, Corporate Relations and Sustainability, Fortum, tel. +358 40 081 3952

Background: Tyumen region
The Tyumen region is the centre of Russian gas and oil production and the wealthiest region after Moscow. More than 600,000 people live in the city of Tyumen. Because of its energy production-focussed industry, the area saw minimal decreases in electricity consumption during the recession, compared to significant decreases elsewhere in Russia. Fortum has three combined heat and power plants in the area, two of them are in the city of Tyumen and one in the nearby city of Tobolsk. In 2009 two-thirds of the electricity OAO Fortum produced was sold in the Tyumen region.

Background: Tyumen CHP-1 power plant
The natural gas-fired Tyumen CHP-1 was commissioned in 1960. The power plant’s production capacity was increased to 450 MW in 1972, and it became the most important energy source for the oil fields in the area. In February 2004, Russia’s first combined-cycle gas turbine plantwas commissioned at Tyumen CHP-1, raising the capacity to 472 MW. Despite its age, the plant remains one of Russia’s most modern power plants. Over the course of fifty years, Tyumen CHP-1 has produced a total of 109 terawatt-hours (TWh) electricity and 151 TWh heat.

Background: Fortum’s investment programme
Fortum’s subsidiary OAO Fortum, operating in Russia, has committed to implementing an investment programme that will increase its electricity production capacity from the current approximately 2,800 MW to about 5,100 MW. The investment programme consists of seven new units, which Fortum plans to commission by the end of 2014. The first three units are estimated to be ready for production in the first half of 2011; the unit being completed at the Tyumen CHP-1 plant is the first of them.

For Fortum, the new capacity is a key driver for solid earnings growth in Russia as it will bring income from new volumes sold and is expected to receive at least a 3-4 times higher price in the capacity market than the old capacity received. The value of the remaining part of the investment programme, calculated at the end of September 2010 exchange rates, is estimated to be EUR 1.7 billion from October 2010 onwards.

Fortum in brief
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 sale of electricity and heat as well as expert services for the energy industry.

Fortum’s operations focus on the Nordic countries, Russia and Baltic Rim area. The competitive energy markets in the fast-growing European and Asian economies also offer growth opportunities in the future. In 2009 Fortum’s sales totalled EUR 5.4 billion and operating profit was EUR 1.8 billion. The Group employs approximately 11,000 people. Fortum’s shares are quoted on NASDAQ OMX Helsinki.

For more information: www.fortum.com

Images from Tyumen (link available to 18 January 2011)