"European leaders have expressed their political will to develop functioning internal energy markets. Now that the agenda of the new European Parliament and the Commission will be set, it is time to put these intentions into practice. The political attention should be on the security of energy supply on the EU level, while a fully-functioning internal market would then take care of the national security of supply", said Fortum's President and CEO Tapio Kuula at Eurelectric's Annual Conference "Building Trust in the New Energy World" in London today. “Making energy markets function would be the best energy efficiency policy, too”, he added.
"The rapid increase of renewable energy is welcome and its share will further increase in the future. However, it is essential that renewable energy is properly integrated in the market, because the current subsidies for renewable energy are becoming very expensive for the consumers and all of Europe."
"Even though the wholesale market prices for electricity have decreased, various taxes, fees and subsidies are hiking end-consumers' energy costs. High prices are threatening the competitiveness of European industries and unnecessarily increasing citizens’ living costs – our customers are worried and that should make us worried."
Mr. Kuula highlighted the importance of revising the current support schemes urgently. This means adopting market-based subsidies and that renewables face the same requirements in terms of market entry as other technologies regarding, for example, grid connection, direct market selling and balancing requirements.
"We need only one goal and that should be to let the emissions trading steer energy efficiency and renewables' development, phase out the production subsidies and limit the role of public interventions in research, development and demonstration of new technologies. The sooner we get there, the better. As we have learned, overlapping targets and measures tend to water down the effectiveness of each other and should be avoided in the future."
A key requirement for developing a functioning internal energy market and utilising renewable energy to its full potential is an adequate transmission system EU-wide. "Network connections must be developed further in order to remove bottle-necks inside and between the countries. The ten-year EU-level action plan should be used in full to drive this target."
In conclusion, Mr. Kuula highlighted the importance of a cost-effective, but rapid transition towards low-carbon energy future as climate change won't wait for better financial times. And, indeed, an affordable transition is possible with well-functioning markets and improved cross-border transmission infrastructure, which will benefit energy consumers, producers and the society as a whole.
For additional information, please contact:
Esa Hyvärinen, Senior Vice President, Corporate Relations, tel. +358 40 826 2646
Helena Aatinen, Senior Vice President, Corporate Communications, tel. +358 40 548 6675
Fortum’s purpose is to create energy that improves life for present and future generations. Catering to the versatile needs of our customers, we generate, distribute and sell electricity and heat, and offer related expert services. Our operations focus on the Nordic and Baltic countries, Russia and Poland. In 2013, Fortum’s sales totalled EUR 6.1 billion and comparable operating profit
was EUR 1.6 billion. We employ approximately 8,800 people. Fortum’s shares are traded on the NASDAQ OMX Helsinki. www.fortum.com