In 2018, EPV Energy’s status as a producer of zero-emission, Finnish electricity grew stronger than ever. The largest wind power farm in Finland began production in Kristiinankaupunki and the settlement agreement on the completion of the OL3 project and related disputes came into effect. In terms of ownership arrangements, the Seinäjoki power plant’s business operations were transferred to EPV Energy and we sold our share of the Meri-Pori coal-fired power plant.
For EPV Energy (EPV), 2018 was a year characterised by changes in its operating environment, reorganisation and both completed and soon to be completed large projects. The IPCC’s climate report further intensified the energy debate and, at the same time, paved the way for the energy market’s inevitable adjustment towards zero-emissions. The increase in 2018 in the price of carbon dioxide emissions was an anticipated scenario, which supports our substantial investments in the reduction of emissions.
EPV’s investments in wind power production have proven a wise decision. Onshore wind power is currently a clear number one in terms of building new energy production facilities. The EU emissions trading sector will probably continue to tighten the level of permissible emissions. In addition, thanks to the meteoric development of wind power technologies, the price of transferring to low-carbon production will be lower than anticipated.
In seven years, EPV has invested around MEUR 400 in wind power, and we now administer four industrial-scale wind power farms. In 2018, the largest wind power farm in Finland was completed in Kristinestad, representing an enormous effort for the entire EPV organisation. Without a doubt, wind power is the energy production method of the future, and consequently we plan to increase our wind power capacity over the next few years. The increase in wind power brought a great deal of work also for EPV’s electricity transmission business, as there were record numbers of new wind power customers over the year.
Asset deals made in heat production and preparing for the time after coal
In 2018, EPV gave up its last coal-fired condensing plant share when the Meri-Pori power plant was sold. On the other hand, EPV purchased the Seinäjoki thermal power station, which brought our number of staff to more than 100.
The government is strongly pushing the banning of coal, which is why EPV is already preparing itself for the time after coal. A common fear within the industry is that the banning policy will extend to other fuels too. For this reason, we are currently analysing the future of both the Seinäjoki and Vaasa power plants. Various fuel bans will significantly diminish the already strained power balance of energy production. We strongly believe that managing emission targets on market terms instead of with bans would yield a considerably better result both for the economy and the climate. If the government keeps to its banning policy, it must accept responsibility for the consequences and support energy operators through this change.
The use of biomass in heat generation has long been the hot potato in debates about energy policy. There is great pressure to increase the use of wood on many fronts: the idea is to replace coal and peat with wood, in addition to which almost a third of the fuel consumed in transport should be derived from renewable energy sources within just ten years. When the same raw material is needed everywhere and its demand exceeds its supply, there is a danger that it becomes too expensive for everyone. Therefore we must consider the future use of biomass very carefully. We are waiting for the government to supply comprehensive reports and policies on this subject, as they are badly needed.
Nuclear power sailing before the wind, hydroelectric power facing opposition
Attitudes to nuclear power are getting more and more positive. People in Finland are finally beginning to understand that zero-emission methods of energy production are necessary. In terms of nuclear power, 2018 was extremely positive. We completed a settlement agreement concerning Olkiluoto 3 and agreed on the resources to complete it. The operating licences of Olkiluoto 1 and 2 were renewed, due to which the plants have a life cycle of at least 20 years more. In March 2019, the Finnish Government granted Olkiluoto 3 an operating licence. It’s commercial implementation is due to start in early 2020.
Hydroelectric power, on the other hand, is facing conflicting views. The running down of hydroelectric power would have extensive detrimental effects on the economy and the availability of vital reserve energy. EPV hopes for larger scale analyses of cause and effect before irreversible legislative amendments are made.
New technologies on the drawing board
We continuously monitor the development of new technologies and strive to anticipate their effects on the electricity market. Solar power and various electricity storage solutions are of particular interest to us. Similarly to wind power, solar power has become considerably cheaper, as have batteries. As with many renewable energy sources, the technology in these fields is taking great strides, and prices are reaching a sensible level for industrial investments. In its own activities, EPV strives to build its future options around these.
Our long-term area of focus in our own development work is the management of reserve energy. As the number of new technologies increases, the systems of managing this energy balance become more complicated, which requires better and better tools. In 2018, the activities of EPV’s Operations Centre in Vaasa have become established, and the centre has expanded into one of the key organisations in Finland performing energy balance management.
EPV says ‘thank you’ and continues its development work
EPV’s successful year and numerous advances are the results of the excellent collaboration with our partners. I want to extend a warm thank you to our employees, decision-makers, land owners and our extensive network of subcontractors. It was a great year, and as a significant energy operator, we are optimistic about the future.
Rami Vuola
CEO
