Press release

Fortum approves Turku region energy solution in Finland

20 October 2011, 8:00 EEST

PRESS RELEASE 20 October 2011

Fortum has decided to approve the co-ownership agreement to consolidate Turku region energy production to the co-owned production company Turun Seudun Maakaasu ja Energiantuotanto Oy (TSME) in Finland. TSME shareholders are Fortum, Turku Energia and the municipalities of Naantali, Raisio and Kaarina. The arrangement requires a favourable decision from all the shareholders, after which the arrangement would be realised at the beginning of 2012.

Fortum’s shareholding in TSME would be 49.5%, Turku Energia’s 39.5%, Raisio municipality’s 5%, Kaarina municipality’s 3% and Naantali municipality’s 3%. Under the agreement, TSME would have the option to also buy Fortum’s Naantali power plant at a later date. The letter of intent regarding the co-owned production company was signed in December 2010.
The intention is to transfer Fortum’s Naantali power plant, Turku Energia’s Oriketo bioheat plant, the Oriketo waste-to-energy plant, and the Kakola heat pump plant to TSME’s possession. TSME will sell the district heat it produces to Turku Energia, the steam to Fortum and the electricity to its shareholders. The entire distribution and sales of Turku region district heat will be transferred to Turku Energia.
"This solution would enable the development of the energy production in Turku region together with our current customers. Comprehensive development of energy production would also improve the competitiveness of district heating as a heating alternative", says Jouni Haikarainen, Vice President at Fortum's Heat Division.

Turun Seudun Maakaasu ja Energiatuotanto Oy will also continue preparations for a new base production solution. Alternatives include building a gasification plant for biofuels in Naantali or a completely new 450-megawatt multifuel power plant. The goal is to significantly increase the use of biofuels in the Turku region, which will reduce carbon-dioxide emissions from energy production. An environmental impact assessment process has already been done for the project. The intention is to make a decision on the construction of new capacity to replace the use of coal during 2012.

Energy production in the Turku region today is largely based on the heat and electricity production of Fortum's Naantali power plant. The power plant produces annually about 1,000 gigawatt-hours (GWh) of electricity for the Nordic market, about 600 GWh of steam for industrial customers, and about 1,500 GWh of district heat for Turun Seudun Kaukolämpö Oy's heat distribution network. The plant has been operating for 50 years, and its renewal will become topical in the near future.

Fortum Corporation

Additional information:
Jouni Haikarainen, Vice President, Fortum, Heat Division, Finland, tel. +358 40 709 5690

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 we deliver excellent value to our shareholders. Our activities cover the generation, distribution and sale of electricity and heat as well as related expert services.

Fortum's operations focus on the Nordic countries, Russia and the Baltic Rim area. In the future, the integrating European and fast-growing Asian energy markets provide additional growth opportunities. In 2010, Fortum's sales totalled EUR 6.3 billion and comparable operating profit was EUR 1.8 billion. We employ approximately 10,500 people. Fortum's shares are quoted on NASDAQ OMX Helsinki.

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