Power

The Power Division consists of Fortum’s power generation, physical operation and trading as well as expert services for power producers.

EUR million I/12 I/11 2011 LTM
Sales 655 693 2,481 2,443
- power sales 631 657 2,353 2,327
of which Nordic power sales* 569 504 2,041 2,106
- other sales 24 36 128 116
Operating profit 367 489 1,476 1,354
Comparable operating profit 341 325 1,201 1,217
Comparable EBITDA 369 352 1,310 1,327
Net assets (at period-end) 6,117 5,996 6,247  
Return on net assets, %     24.6 22.3
Comparable return on net assets, %     19.9 20.1
Capital expenditure and gross investments in shares 24 33 148 139
Number of employees 1,842 1,812 1,847  
         
Power generation by source, TWh I/12 I/11 2011 LTM
Hydropower, Nordic 6.1 4.1 21.0 23.0
Nuclear power, Nordic 6.5 6.8 24.9 24.6
Thermal power, Nordic 0.2 1.7 2.2 0.7
Total in the Nordic countries 12.8 12.6 48.1 48.3
Thermal power in other countries 0.3 0.3 1.2 1.2
Total 13.1 12.9 49.3 49.5
         
Nordic sales volumes, TWh I/12 I/11 2011 LTM
Nordic sales volume 13.2 13.2 50.0 50.0
of which Nordic power sales volume* 12.0 10.5 44.3 45.8
* The Nordic power sales income and volume do not include thermal generation, market price-related purchases or minorities (i.e. Meri-Pori, Inkoo and imports from Russia).
         
Sales price, EUR/MWh I/12 I/11 2011 LTM
Power's Nordic power price** 47.2 47.9 46.1 46.0
** Power's Nordic power price does not include sales income from thermal generation, market price-related purchases or minorities (i.e. Meri-Pori, Inkoo and imports from Russia).

January - March

In the first quarter of 2012, the Power Division’s operating profit was EUR 367 (489) million. A gain of EUR 47 (0) million, relating to the divestments of small hydro plants in Finland was booked into the first quarter of 2012. Operating profit was also impacted EUR -21 (164) million by Other items affecting comparability, mainly including the effects from financial derivatives hedging. The comparable operating profit in the first quarter was EUR 341 (325) million, EUR 16 million higher than in the corresponding period in 2011. The system and all area prices were clearly lower in the beginning of 2012, but a higher hedge price kept the achieved power price close to last year's level. Higher reservoir levels in the beginning of the year, compared to the corresponding period in 2011, increased hydro generation significantly. Nuclear availability was at a high level in all power plants except Oskarshamn 1 and 3. The total nuclear volume was thus slightly lower than during the corresponding period in 2011. Thermal production was clearly lower due to low area prices.

The combined effect of increased hydro, less nuclear and thermal volumes combined with a slightly lower achieved power price had a positive impact of approximately EUR 30 million during the first quarter in 2012 compared to corresponding period in 2011. Operating costs increased by approximately EUR 10 million, mainly due to higher nuclear fuel costs and inflationary effects. During the first quarter, the nuclear waste fees increased in Sweden by EUR 4 million. The increase in waste fees is estimated to be approximately EUR 15 million for the full year 2012.

In the first quarter of 2012, the division's total power generation in the Nordic countries was 12.8 (12.6) TWh, which corresponds to an approximately 2% increase compared to the same period in 2011. Power’s achieved Nordic power price amounted to EUR 47.2 per MWh, which was only EUR 0.7 per MWh lower than in the first quarter of 2011.

Fortum has two fully-owned reactors in Loviisa and is a co-owner in eight reactors at the Olkiluoto, Oskarshamn and Forsmark nuclear power plants. Nuclear availability was at high level in all of the power plants except Oskarshamn. Oskarshamn 1 was shut down at the end of October 2011 for an extensive turbine overhaul and will stay shut down until after the planned annual outage 23 April – 17 June 2012. Oskarshamn 2 and 3 suffered from technical problems and were shut down for a total of 4 weeks. In addition, Oskarshamn 3 has been operating at an approximately 100-MW reduced output until the planned annual outage 12 April – 11 May 2012, waiting that all power increase related tests to be completed.

European-wide safety evaluations have been carried out after the Fukushima incident. As part of the evaluations, so-called peer reviews were carried out in several European nuclear power plants, including the Loviisa nuclear power plant, in March 2012. The European Commission will submit a consolidated report of the national reports to the European Council in June 2012.

In March, Fortum became involved in the purification of Fukushima. Fortum is a key supplier to EnergySolutions LLC, which has been selected by Toshiba Corporation as the technology supplier for a project to decontaminate water from the damaged nuclear power plant at Fukushima. The radioactive liquid purification process used in the project will use ion exchange materials developed by Fortum. Fortum will supply thousands of kilos of ion exchange materials in granule form to EnergySolutions for the purification process. The value of the supplies is estimated to be tens of millions of euros over the next couple of years.

Fortum’s preparations for the French hydro concession bidding have progressed as planned.