News Article | October 25, 2016
- Operating profit EUR -6 (-682) million, of which EUR -65 (-761) million relates to items affecting comparability. In the corresponding period of 2015, the negative impact was mainly due to the decision on the early closing of two nuclear units in Sweden - Earnings per share EUR -0.03 (-0.74), of which EUR -0.06 (-0.78) related to items affecting comparability. In the corresponding period of 2015, EUR -0.80 per share related to the decision on the early closure of two nuclear units in Sweden - Operating profit EUR 430 (-188) million, of which EUR -25 (-752) million relates to items affecting comparability. In the corresponding period of 2015, the negative impact was mainly due to the decision on the early closing of two nuclear units in Sweden - Earnings per share EUR 0.40 (-0.28), of which EUR -0.03 (-0.77) related to items affecting comparability. In the corresponding period of 2015, EUR -0.80 per share related to the decision on the early closure of two nuclear units in Sweden - Fortum's business structure was reorganised and the new Executive Management Team took place as of 1 April 2016 - Fortum continues to expect the annual electricity demand to grow in the Nordic countries by approximately 0.5% on average - The Generation segment's Nordic generation hedges: approximately 80% hedged at EUR 29 per MWh for the rest of 2016; and for 2017, approximately 50% hedged at EUR 28 per MWh; and for 2018 approximately 30% hedged at EUR 25 per MWh. - Operating profit level (EBIT) for the Russia segment, RUB 18.2 billion, is targeted to be reached during 2017-2018. The euro-denominated result level will be volatile, due to currency translation effects “The third quarter is always challenging due to the seasonality of our business. This year was no exception. Fortum’s results continued to decline mainly due to significantly lower hydro production volumes. The decline was partially offset by strong performance in the Russia segment, a clearly higher achieved power price and higher nuclear volumes compared to the third quarter of 2015. There are, however, some positive signs on the power market, mainly driven by commodity and emission prices. Forward market prices increased at the very end of the quarter and are now clearly higher than at the end of the second quarter. Another positive development was the Swedish government’s budget proposal in September; it included the timetable for lowering the real-estate tax on hydro assets and for phasing out the nuclear capacity tax over the coming years. We are very pleased with the swift decision and the finalisation of the timetable, which gives regulatory stability to operate the plants and plan the necessary safety investments. This is completely in line with what we have been advocating for; a regulation and taxation policy where the different forms of CO2-free production are treated more equally. As the investment programme in Russia was completed during the spring, OAO Fortum’s new capacity has been the key driver for the earnings growth in the Russia division. During the quarter, Fortum finalised the acquisition of Ekokem, a leading Nordic circular economy company. The deal marks a very important step in the implementation of our strategy and gives us access to new revenue streams independent on the Nordic power price. We have continued reducing fixed costs according to earlier announced plan and the progress has been good. Enabled by our strong net cash position, we will carry on our efforts to grow and we are constantly looking for good investment opportunities, as outlined in our strategy.“ Following the divestment of the Swedish distribution business, Fortum no longer has electricity distribution operations. The Distribution segment was reclassified as discontinued operations as of the first quarter of 2015. The financial results discussed in this interim report are for the continuing operations of Fortum Group. In the third quarter of 2016, sales increased to EUR 732 (661) million, mainly due to the consolidation of DUON and Ekokem into Fortum Group. Comparable operating profit totalled EUR 58 (79) million and reported operating profit totalled EUR -6 (-682) million. Fortum's operating profit for the period was impacted by items affecting comparability, including sales gains, Ekokem transaction costs and IFRS accounting treatment (IAS 39) of derivatives mainly used for hedging Fortum's power production, as well as nuclear fund adjustments for continuing operations, amounting to EUR -65 (-761) million (Note 4 and 6). The corresponding period of 2015, included an EUR -784 million impact from the decision on the early closure of two nuclear units in Sweden (Note 4 and 6). The share of profit from associates was EUR 11 (-95) million, of which Hafslund represented EUR 10 (10), TGC-1 EUR 7 (6) and Fortum Värme EUR -4 (-8) million. The share of profit from Hafslund and TGC-1 are based on the companies' published second-quarter 2016 interim reports (Note 14). In the corresponding period of 2015, the decision on the early closure of two nuclear units in Sweden impacted the share of profit from associates by EUR -104 million (Note 6). In addition, for Fortum Värme the corresponding period in 2015 included the paid compensation for refinancing the interest-bearing loans from Fortum (Note 14). In January-September 2016, sales was EUR 2,489 (2,495) million. Comparable operating profit totalled EUR 455 (565) million and reported operating profit totalled EUR 430 (-188) million. Fortum's operating profit for the period was impacted by items affecting comparability, including sales gains, Ekokem transaction costs and IFRS accounting treatment (IAS 39) of derivatives mainly used for hedging Fortum's power production, as well as nuclear fund adjustments for continuing operations, amounting to EUR -25 (-752) million (Note 4). The corresponding period of 2015, included a EUR -784 million impact from the decision on the early closure of two nuclear units in Sweden (Note 4 and 6). The share of profit from associates was EUR 116 (-15) million, of which Hafslund represented EUR 42 (31), TGC-1 EUR 34 (34) and Fortum Värme EUR 40 (23) million. The share of profit from Hafslund and TGC-1 are based on the companies' published fourth-quarter 2015, and first- and second-quarter 2016 interim reports (Note 14). The corresponding period in 2015 was affected by the decision on the early closure of two nuclear units in Sweden, which impacted the share of profit from associates by EUR -104 million (Note 6). In addition, for Fortum Värme the corresponding period in 2015 was lower mainly due to the paid compensation for refinancing the interest-bearing loans from Fortum. Net financial expenses were EUR -135 (-123) million and include changes in the fair value of financial instruments of EUR 0 (-14) million. In the corresponding period of 2015, net financial expenses included EUR 38 million compensation from prepayment of loans by Fortum Värme (Note 14). Profit before taxes was EUR 411 (-325) million. The corresponding period of 2015, was impacted by EUR -888 million due to the decision on the early closing of the two nuclear units in Sweden. Taxes for the period totalled EUR -54 (80) million. The effective income tax rate according to the income statement was 13.1% (24.5%). The comparable effective income tax rate, excluding the impact of the share of profit from associated companies and joint ventures as well as non-taxable capital gains, was 19.0% (25.6%) (Note 10). The profit for the period for continuing operations was EUR 357 (-246) million. Earnings per share for continuing operations were EUR 0.40 (-0.28), of which EUR -0.03 (-0.77) per share relates to items affecting comparability. In the corresponding period of 2015, the impact of the decision on the early closing of two nuclear units in Sweden was EUR -0.80 per share. In January-September 2016, net cash from operating activities from continuing operations decreased by EUR 425 million to EUR 471 (896) million, mainly due to lower Comparable EBITDA EUR 70 million, higher income taxes paid EUR 136 million, and lower realised foreign exchange gains and losses EUR 137 million. In June, Fortum paid income taxes in Sweden totalling EUR 127 million regarding tax disputes. The appeal process is ongoing and based on legal opinions no provision is made, and the payment is booked as a receivable (Note 22). Realised foreign exchange gains and losses of EUR 112 million relate to the rollover of foreign exchange contract hedging loans to Fortum's Swedish and Russian subsidiaries. Capital expenditures increased by EUR 20 million to EUR 367 (347) million. Net cash used in investing activities increased to EUR 1,439 (0) million, mainly due to the acquisition of shares of EUR 667 (6) million. Acquisition of shares relates mainly to acquisition of Ekokem and DUON. Increase in other interest-bearing receivables, EUR 376 million, relates mainly to bank deposits, given as trading collaterals to commodity exchanges. In 2015, the change of shareholder loans to associated companies and joint venture, EUR 301 million, includes repayments by Fortum Värme amounting to EUR 376 million. Cash flow before financing activities is EUR -968 (6,303) million. In 2015, the impact from discontinued operations was EUR 6,457 million. Fortum paid dividends totalling EUR 977 (1,155) million in April 2016. Payments of long-term and short-term liabilities totalled EUR 962 (919) million including repayment of a EUR 750 million bond and Ekokem loans of EUR 115 million. The total net decrease in liquid funds was EUR 2,887 million (increase 5,318). Total assets decreased by EUR 1,429 million to EUR 21,338 (22,767 at year-end 2015) million. Liquid funds at the end of September 2016 were EUR 5,322 (8,202 at year-end 2015) million. Capital employed was EUR 18,362 (19,870 at year-end 2015) million, a decrease of EUR 1,508 million. Equity attributable to owners of the parent company totalled EUR 13,100 (13,794 at year-end 2015) million. The decrease in equity attributable to owners of the parent company totalled EUR 694 million and was mainly from dividends paid EUR 977 million and the net profit for the period EUR 352 million. Fortum was net cash positive at the end of the period. Net cash decreased by EUR 2,058 million to EUR 137 (2,195 at year-end 2015) million. At the end of September, the Group’s liquid funds totalled EUR 5,322 (8,202 at year-end 2015) million. Liquid funds include cash and bank deposits held by OAO Fortum amounting to EUR 110 (76 at year-end 2015) million. In addition to liquid funds, Fortum had access to approximately EUR 2.0 billion of undrawn committed credit facilities (Note 16). Net financial expenses in January-September were EUR -135 (-123) million, of which net interest expenses were EUR -132 (-156) million. Net financial expenses include changes in the fair value of financial instruments of EUR 0 (-14) million and EUR 38 million compensation from prepayment of loans by Fortum Värme for January-September 2015 . In June 2016, Fortum signed a EUR 1,750 million syndicated Multicurrency Revolving Facility Agreement. The committed facility will be used for general corporate purposes and replaces the existing credit facility signed in July 2011. The facility has an initial maturity of five years and Fortum may request two one-year extension options. Fortum’s long-term credit ratings were unchanged. Standard & Poor's rating is BBB+ and the short-term rating A-2. The outlook is stable. Fitch Ratings long-term Issuer Default Rating (IDR) and senior unsecured rating is BBB+ and the short-term IDR is F2 with a stable outlook. For the last twelve months comparable net debt to EBITDA was -0.1 (-1.7 at year-end 2015). Gearing was -1% (-16% at year-end 2015) and the equity-to-assets ratio 62% (61% at year-end 2015). Equity per share was EUR 14.75 (15.53 at year-end 2015). For the last twelve months return on capital employed totalled 3.2% (22.7% at year-end 2015). According to preliminary statistics, electricity consumption in the Nordic countries was 80 (81) terawatt-hours (TWh) during the third quarter of 2016. In January-September 2016, electricity consumption increased by 5 TWh to 283 (278) TWh, mainly due to colder weather during the winter. At the beginning of 2016, the Nordic water reservoirs were at 98 TWh, which is 15 TWh above the long-term average and 18 TWh higher than a year earlier. By the end of the third quarter 2016, reservoirs were 3 TWh below the long-term average and 12 TWh lower than at the end of September 2015. Reservoir levels have decreased due to below-normal precipitation during 2016. In the third quarter of 2016, the average system spot price was EUR 25.2 (13.3) per MWh. The average area price in Finland was EUR 31.6 (30.1) per MWh and in Sweden SE3 (Stockholm) EUR 29.6 (15.5) per MWh. The system spot price increased compared to the exceptionally low level in the third quarter of 2015, which was caused by high inflows and late snow melt. During January-September 2016, the average system spot price was EUR 24.4 (20.7) per MWh, with the area price in Finland at EUR 30.8 (29.3) per MWh and in Sweden SE3 (Stockholm) at EUR 26.7 (21.7) per MWh. In Germany, the average spot price during the third quarter of 2016 was EUR 28.3 (32.8) per MWh, and during January-September 2016 EUR 26.1 (31.1) per MWh. The market price of CO2 emission allowances (EUA) was EUR 8.1 per tonne at the beginning of the year. During the third quarter the price fluctuated between EUR 4 and 5 per tonne and ended at EUR 4.9 per tonne at the end of September 2016. Fortum operates both in the Tyumen and Khanty-Mansiysk area of Western Siberia, where industrial production is dominated by the oil and gas industries, and in the Chelyabinsk area of the Urals, which is dominated by the metal industry. According to preliminary statistics, Russian electricity consumption was 231 (225) TWh during the third quarter of 2016. The corresponding figure in Fortum’s operating area in the First price zone (European and Urals part of Russia) was 179 (174) TWh. In January-September 2016, Russian electricity consumption was 740 (731) TWh and the corresponding figure in Fortum’s operating area in the First price zone was 567 (561) TWh. In the third quarter of 2016, the average electricity spot price, excluding capacity price, increased by approximately 10% to RUB (Russian rouble) 1,298 (1,184) per MWh in the First price zone. In January-September 2016, the average electricity spot price, excluding capacity price, increased by approximately 5% to RUB 1,204 (1,146) per MWh in the First price zone. More detailed information about the market fundamentals is included in the tables at the end of the report. In June, a broad parliamentary agreement covering long-term energy policies was presented by the government and parts of the opposition. One of the key elements of the agreement was tax reductions for the energy sector. In September, the Swedish government presented a budget proposal for the coming years, including a timetable for the tax reductions. The proposal is subject to the formal decision by the Parliament in spring 2017. The ratification of the global climate agreement adopted in Paris in December 2015 has proceeded more quickly than anticipated and the Agreement will enter into force already on 4 November 2016. The European Union finalised its ratification on 5 October 2016. Currently, 77 parties representing over 60% of global emissions have submitted their ratification. In July, the European Commission released proposals aiming to accelerate Europe’s transition to a low-carbon economy. The key elements of the package include binding greenhouse gas reduction targets for member states in the non-ETS sectors (e.g. transport, buildings, agriculture and waste management) in 2021-2030, inclusion of land use and forestry emissions in the 2030 legislative framework, and a European strategy for low emission mobility. The latter relies heavily on electrification of the transport sector while recognising the role of biofuels too. The summer package, together with the 2015 proposal for the amendment of the emissions trading directive, will implement the EU target of a 40% emission reduction by 2030. The Finnish budget proposal for 2017 included key energy-related decisions on the increase of fuel taxes, the so-called CHP tax compromise, and the decision to assess how to bring wind power into the scope of the real-estate taxation applicable to power plants. Currently, wind power is subject to a lower tax rate. New tax treatment would be applicable from 2018 onwards. Also, the earlier announced mechanism to offset the indirect costs of the EU Emissions Trading System for energy-intensive industries was approved as part of the budget proposals. The Parliament is set to adopt the related budget laws during autumn 2016. Fortum's financial results are exposed to a number of economic, strategic, political, financial and operational risks. One of the key factors influencing Fortum's business performance is the wholesale price of electricity in the Nordic region. The key drivers behind the wholesale price development in the Nordic region are the supply-demand balance, the prices of fuel and CO2 emissions allowances, and the hydrological situation. The continued uncertainty in the global and European economies has kept the outlook for economic growth unpredictable. The overall economic uncertainty impacts commodity and CO2 emissions allowance prices, and this could maintain downward pressure on the Nordic wholesale price of electricity. In Fortum's Russian business, the key drivers are economic growth, the rouble exchange rate, regulation around the heat business, and further development of electricity and capacity markets. In all regions, fuel prices and power plant availability also impact profitability. In addition, increased volatility in exchange rates due to financial turbulence could have both translation and transaction effects on Fortum's financials, especially through the Russian rouble and Swedish krona. In the Nordic countries, the regulatory and fiscal environment for the energy sector has also added risks for utility companies. Despite macroeconomic uncertainty, electricity is expected to continue to gain a higher share of total energy consumption. Electricity demand in the Nordic countries is expected to grow by approximately 0.5% on average, while the growth rate for the next few years will largely be determined by macroeconomic developments in Europe, and especially in the Nordic countries. During January-September 2016, oil and coal prices increased, while the price of CO2 emission allowances (EUA) declined. The price of electricity for the upcoming twelve months appreciated in the Nordic area as well as in Germany, and both are now on higher levels than at the end of the third quarter of 2015. In mid-October 2016, the quotation for coal (ICE Rotterdam) for the remainder of 2016 was around USD 78 per tonne, and for CO2 emission allowances for 2016 around EUR 6 per tonne. The Nordic system electricity forward price in Nasdaq Commodities for the rest of 2016 was around EUR 37 per MWh and for 2017 around EUR 30 per MWh. In Germany, the electricity forward price for the rest of 2016 was around EUR 37 per MWh and for 2017 around EUR 32 per MWh. Nordic water reservoirs were about 4 TWh below the long-term average and 14 TWh below the corresponding level in 2015. The Generation segment’s achieved Nordic power price typically depends on such factors as the hedge ratios, hedge prices, spot prices, availability and utilisation of Fortum's flexible production portfolio, and currency fluctuations. Excluding the potential effects from changes in the power generation mix, a 1 EUR/MWh change in the Generation segment’s Nordic power sales achieved price will result in an approximately EUR 45 million change in Fortum's annual comparable operating profit. In addition, the comparable operating profit of the Generation segment will be affected by the possible thermal power generation volumes and its profits. In Finland, the technical plan and cost estimates for nuclear waste management are updated every third year. The new technical plan was published in 2015 and related cost estimates were updated during the second quarter of 2016. The update had a minor positive impact on Fortum and is included in the result for the second quarter of 2016. As a result of the nuclear stress tests in the EU, the Swedish nuclear safety authority (SSM) has decided to propose new regulations for Swedish nuclear reactors. The process is ongoing. Fortum emphasises that maintaining a high level of nuclear safety is the highest priority, but considers EU-level harmonisation of nuclear safety requirements to be of continued importance. In 2015, the Swedish Government increased the nuclear waste fund fee from approximately 0.022 to approximately 0.04 SEK/kWh for the 2015-2017 period. The estimated impact on Fortum is approximately EUR 25 million annually. The process to review the Swedish nuclear waste fees is done in a three-year cycle. The Swedish Nuclear Fuel and Waste Management Co (SKB) will update the new technical plan in January 2017 for SSM to review. The final decision on the new nuclear waste fees will be made by the Swedish Government in December 2017. However, as a result of the decision on early closure of nuclear power plants, the Swedish Radiation Safety Authority, SSM, recalculated the waste fees for the Oskarshamn and Ringhals power plants. In Sweden, the key political parties (representing 75% of parliament) announced a new framework agreement on energy policy in June 2016. It was decided that: (1) the tax on nuclear thermal effect will be phased out over two years starting in 2017, (2) the regulatory framework for the nuclear waste fund will be reformed in order to enhance yield, (3) the lifetime in the waste fee calculation would possibly be extended from 40 to 50 years, and (4) the third-party liability for nuclear accidents will increase, ratifying a decision made earlier. No date was mentioned for a mandatory nuclear phase out, but a vision of a 100% RES power system by 2040 was stated. In September the Swedish government presented the budget proposal for the coming years, which included a timetable for the tax reductions in the energy commission agreement. The budget states that the nuclear capacity tax will be reduced to 1500 SEK/MW per month from 1 July 2017 and abolished on 1 January 2018. In 2016, the Swedish nuclear capacity tax for Fortum is estimated to be approximately EUR 84 million. In 2017, the tax is estimated to decrease with approximately EUR 32 million due to the tax decrease and another EUR 5 million due to the premature closure of Oskarshamn 1 in the middle of the year. In 2018, there is no capacity tax. A decision was also made to decrease the hydropower real-estate tax over a four-year period beginning in 2017, from todays 2.8% to 0.5%. The real-estate tax on hydro will, as stated in the government’s budget, be reduced in four steps: in January 2017 to 2.2%; in January 2018 to 1.6%; in January 2019 to 1.0%; and in January 2020 to 0.5%. In 2016, the Swedish hydropower real-estate tax is estimated to be approximately EUR 115 million. In 2017, the tax is estimated to decrease with approximately EUR 20 million. In addition to the decrease in the tax rate, the hydropower real-estate tax values, which are linked to electricity prices, will be updated starting 2019. The real-estate tax values are updated every six years. With the current low electricity prices the tax values in 2019 will be clearly lower than today. The process for renewing existing hydro permits will also be reformed, primarily in order to safeguard small hydro. The tax reductions are planned to be financed through a higher electricity consumption tax that will mainly affect households. Electricity-intensive industries will be exempt. In October, the Swedish Energy Agency is expected to make a concrete proposal on how to increase the production of renewable electricity by 18 TWh in 2020-2030. The work for increased transmission capacity both within Sweden and to neighbouring countries will continue, as will efforts to promote a well-functioning retail market in the Nordic region. All the above mentioned decisions are positive and a step in the right direction, as all production forms are more evenly taxed. However, some questions remain regarding deployment of green certificates for the 2020-2030 period. The decisions will not impact the nuclear closures that have already been decided on in Sweden. OKG AB decided in 2015 to permanently discontinue electricity production at Oskarshamn unit 1 and to start decommissioning after the permission for service operation has been granted by the relevant Swedish authorities. The first two stages of the decommissioning process were approved in June 2016. The date for discontinued production and the start of decommissioning has been set to 30 June 2017. Oskarshamn unit 2, which has been out of operation since June 2013 due to an extensive safety modernisation, will stay out of operation. The closing processes are estimated to take several years. In May, the Finnish Government decided to increase the tax on heating fuels by EUR 90 million annually from 2017 onwards. The negative impact on Fortum is estimated to be approximately EUR 5 million per year. The Russia segment's new capacity generation built after 2007 under the Russian Government's capacity supply agreement (CSA) is a key driver for earnings growth in Russia, as it is expected to bring income from new volumes sold and also to receive considerably higher capacity payments than the old capacity. The regulation related to the time frame (10 vs.15 years) of the calculation of capacity payments was finally approved in June 2016. The decision was made to keep the current 10-year time frame, and Fortum will hence receive guaranteed capacity payments for a period of 10 years from the commissioning of a plant. The received CSA payment will vary depending on the age, location, size and type of the plants, as well as on seasonality and availability. CSA payments can vary somewhat annually because they are linked to Russian Government long-term bonds with 8 to 10 years maturity. In addition, the regulator will review the earnings from the electricity-only market three years and six years after the commissioning of a unit and could revise the CSA payments accordingly. According to rules approved by the Russian Government in 2015, the competitive capacity selection for generation built prior to 2008 (CCS, without capacity supply agreements) takes place annually. At the end of 2015, the CCS for 2016 and the long-term CCS for 2017-2019 were held. In September of 2016, the long-term CCS for 2020 was held. The majority of Fortum’s plants were selected. The volume of Fortum’s installed "old" capacity not selected in the auction totalled 195 MW (out of 2,214 MW), for which Fortum has obtained forced mode status, i.e. it will receive payments for the capacity. In 2014, the new heat market model roadmap proposed by the Ministry of Energy was approved by the Russian Government. If implemented, the reform should provide heat market liberalisation by 2020 or, in some specific areas, by 2023. In May 2016, the draft law on the heat reform was submitted by the Russian Government to the state Duma (Parliament). The law still requires the consent of the regional and local authorities before starting the reform in certain pilot regions. The Parliament hearings are expected in the fourth quarter of 2016. The targeted operating profit (EBIT) level of RUB 18.2 billion in the Russia segment is expected to be reached during 2017-2018. The segment’s profits are impacted by changes in power demand, gas prices and other regulatory developments. Economic sanctions, the currency crisis, oil prices and the surge in inflation have impacted overall demand. As a result, gas prices and electricity prices have not developed favourably as expected. Fortum estimates the Russian annual average gas price growth to be 3.6% in 2016 which is lower than the previous estimate of 4.9% because no indexation of gas tariffs is expected during 2016. The euro-denominated result level will be volatile due to the translation effect. The income statements of non-euro subsidiaries are translated into the Group reporting currency using average exchange rates. The Russia segment's result is also impacted by seasonal volatility caused by the nature of the heat business, with the first and last quarter being clearly the strongest. In December 2014, Fortum, Gazprom Energoholding LLC and Rosatom State Corporation signed a protocol to start a restructuring process of the ownership of TGC-1 in Russia. The discussions have not yet come to a conclusion. It is not possible to estimate the timetable. Fortum currently expects its capital expenditure, excluding acquisitions, for its continuing operations in 2016 to be approximately EUR 650 million. The annual maintenance capital expenditure is estimated to be about EUR 300-350 million in 2016, below the level of depreciation. The effective corporate income tax rate for Fortum in 2016 is estimated to be 19-21%, excluding the impact of the share of profits of associated companies and joint ventures, non-taxable capital gains and non-recurring items. At the end of September 2016, approximately 80% of Generation's estimated Nordic power sales volume was hedged at EUR 29 per MWh for the remainder of 2016. The corresponding figures for the 2017 calendar year were approximately 50% at EUR 28 per MWh, and for the calendar year 2018 approximately 30% at EUR 25 per MWh. The reported hedge ratios may vary significantly, depending on Fortum's actions on the electricity derivatives markets. Hedges are mainly financial contracts, most of them Nasdaq Commodities forwards.Espoo, 24. lokakuuta 2016 The condensed interim report has been prepared in accordance with International Accounting Standard (IAS) 34, Interim Financial Reporting, as adopted by the EU. The interim financials have not been audited. Fortum Corporation’s Financial Statements Bulletin for 2016 will be published on 2 February 2017, at approximately 9.00 EET. Fortum’s Financial Statements and Operating and Financial Review for 2016 will be published during week 10 at the latest. Fortum will publish three interim reports in 2017: Fortum's Annual General Meeting is planned to take place on 4 April 2017 and the possible dividend-related dates planned for 2017 are: Fortum's Capital Markets Day will take place on 16 November 2016 at Fortum HQ, Keilaniementie 1 Espoo. The invitation is available at www.fortum.com/investors. More information, including detailed quarterly information, is available on Fortum’s website at www.fortum.com/investors
News Article | September 28, 2016
In April this year, Preem, Sekab and Sveaskog entered into a collaboration to develop a gasoline fuel based entirely on forest resources with support from the Swedish Energy Agency. The consortium has now selected the bio-isobutene process developed by the French industrial biotech Global Bioenergies for the conversion of wood-derived sugars into a high-performance gasoline. The consortium will study various plant scenarios t convert forestry products and residues profitably into bio-isooctane, a 100-octane rating, high-performance bio-based gasoline derived from bio-isobutene. The value chain will rely on Sveaskog’s forestry activities, Sekab’s CelluAPP biomass to sugar conversion process, Global Bioenergies wood-sugars to isobutene process and Preem’s gasoline production processes, blending and retailing activities. With close to 30 million hectares of forest land (14% of which being owned and managed by Sveaskog), Sweden positions itself as a leader in the sustainable supply of resources for the energy transition. Sveaskog’s priority is to develop new uses for forest biomass. Our assessment is that forest resources will play a crucial role in the green transition to a fossil-free society. The value chain developed here is of particular interest for Sveaskog since it can use a range of forestry derived by-products and targets a drop-in molecule. The Bio-Based Gasoline Project will enable the large scale commercial deployment of our CelluAPP wood-conversion technology and will demonstrate how it can open the forestry sector to the vast new array of markets and in the first instance to high performance bio-based gasoline. Global Bioenergies is also partnering with Audi on the production of bio-isobutene-derived iso-octane.(Earlier post.) Isobutene is a four-carbon branched alkene and one of four isomers of butylene (C H ); isobutene dimerization (putting two isobutene molecules together) and subsequent hydrogenation produces the eight-carbon molecule isooctane (C H ). Pure isooctane (2,2,4 trimethylpentane) has both a high research octane number (RON) and a high motor octane number (MON): 100 RON and 100 MON. A low Reid vapor pressure of 1.8 psi make it also attractive for bending into reformulated gasoline. As a 100% drop-in fuel, isooctane can be used in any blending ratio with all standard fuels for gasoline motors.
News Article | November 29, 2016
Swedish plans for a 100% renewable supply by 2040 have received a boost with plans for a sharp cut in tax on self-consumed solar energy. Currently, solar system owners with a cumulative capacity of 255kW or more are required to pay a tax of around SKr0.3/kWh ($0.032/kWh) on all energy that is self-consumed. Under proposals outlined by the government, this tax is expected to be cut to SKr0.005/kWh, removing a key barrier for larger real estate players with solar systems on their buildings. Johan Lindahl, spokesperson for Sweden’s solar energy association Svensk Solenergi, explained: “It is basically a tax exemption which removes the financial barrier for large property owners who want to build several PV systems. The proposed changes apply only to the electricity produced and consumed within the same connection point to the grid.” An investigation into the current tax arrangements is due to conclude in January, but according to a government statement, the tax rules are likely to change from July next year. In addition, the Swedish government says it intends to consult the European Commission over a complete removal of the tax under EU state aid rules. Milan Nitzschke, president of solar trade group EU ProSun, said: “Fiscal hurdles or additional levies create barriers for investments in renewable energies. Other European member states should take close note and follow the Swedish example.” The changes apply to self-consumed energy only, solar power fed into the grid will continue to be subject to the energy tax which is paid by all consumers. In another boost for renewables, Sweden has launched a support scheme for electricity storage, subsidising up to 60% of the installation costs for domestic consumers with renewables up to a maximum of SKr50,000. Daniel Kulin, an analyst at the Swedish Energy Agency, explained that the storage programme will run through 2019 with a budget of SKr25m in 2016 and SKr50m annually from 2017-2019. Though the exact division between R&D and installation has not yet been determined it is likely to be close to 50/50, according to Kulin. He said: “It’s a very good investment for Sweden. Benefits include higher resilience of the electricity system and higher penetration of renewables.” The developments come as the Swedish Energy Agency presents a solar strategy that includes a vision for PV to contribute 7-14TWh in 2040, or 5%-10% of the country’s annual electricity consumption. If this goal is reached, Sweden will have to install 7-14GW of PV by then, from the current 120MW total.
News Article | February 9, 2015
For a lesson in global energy history, look no further than Stockholm’s oldest power plant. Since 1903, Fortum Oyj’s Vaerta harbor site has generated power using coal, oil, natural gas and even considered nuclear. Now it’s phasing out the last coal furnace and replacing it with the world’s largest combined heat and power generator that will burn just wood chips and timber scraps by next year. “It’s like looking at the growth rings of Swedish energy policy,” Ulf Wikstroem, an environmental manager at Fortum, said by phone Jan. 13 from Stockholm. “We plan to have the whole plant running on biomass by 2030 at the latest.” Fortum’s $530 million project is part of the region’s push toward green energy. Biomass, which can include everything from waste and residue from wood to leftover food and cow dung, is poised to supplant fossil fuels as early as 2018, according to Markedskraft ASA, an energy adviser in Arendal, Norway. Denmark’s Dong Energy A/S is switching half of its coal generators to biomass by 2020. Sweden’s Vattenfall AB is also increasing biomass use, while limiting output at fossil-fuel units, the main source of global carbon-dioxide emissions. While not the cleanest form of energy, burning wood has little impact on the climate because it has already soaked up from the atmosphere during its lifetime as much carbon dioxide as it releases as a fuel. Sweden, the Nordic region’s biggest economy, surpassed its 2020 European Union target of 49 percent renewable energy in 2012. The share will reach 57 percent by 2030 with current policies, according to the Swedish Energy Agency. The EU’s target is 20 percent renewable energy by 2020, from 14 percent in 2012. In the U.S., President Barack Obama has ordered the federal government to get 10 percent of its energy from renewables this year. China, the world’s biggest energy user, plans to generate 15 percent of its needs from non-fossil sources by 2020. Envoys from 190 nations will meet at United Nations-sponsored talks in Paris in December to draw up carbon-dioxide emission limits. The current goal calls for policy makers to keep global warming increases to 2 degrees Celsius (3.6 degrees Fahrenheit) by the end of the century. Across Sweden, facilities burning biomass to generate electricity increased 26 percent since 2009 to 201, according to a report in September by Svebio, a Stockholm-based group lobbying for biomass. Output was 10.4 terawatt-hours in 2013, according to Entso-E, a regional grid lobby group. That compares with 9.2 terawatt-hours of electricity from Oskarshamn-3, the nation’s biggest reactor, last year. As much as 6 percent of the Nordic region’s power was generated by burning biomass in 2013, compared with 3 percent in Europe, Entso-E data show. Dong, based in Copenhagen, plans to boost biofuel use at 10 power plants to 50 percent in the next five years, from 18 percent now, said Jens Price Wolf, the director of asset management for the utility’s thermal units. Vattenfall has sold two of its three Danish coal-fired plants “and is looking to divest the last one,” Chief Executive Officer Magnus Hall told reporters and analysts on Thursday. The company also has plans to convert the 610-megawatt coal- and oil-fired plant to run on biomass, its website shows. When Finland’s 1,600-megawatt Olkiluoto-3 nuclear reactor starts in about four years, most of the Nordic fossil-fuel generators will be too expensive, according to Olav Botnen, an analyst at Markedskraft. This means power output from burning biomass will surpass coal for the first time, he said. The Nordic region is on course for a power glut of as much as 10 percent of annual demand in 2020, Markedskraft projects. Amid the smell of wood chips on a rainy December morning, the rounded exterior of Fortum’s new boiler sits under towers of scaffolding. It stands in contrast to the 28-acre (11.5-hectare) site’s older, high-ceilinged brick structures, with tiled walls and ornamental cast-iron railings. “The new plant has a more ambitious form, with a proper outside and not just a concrete box,” Anders Johnson, an industrial economist and author of Norra Djurgaardsstaden, a history of the area, said in a Jan. 27 interview. It’s a step back to the designs of public buildings a century ago, he said. The 330-megawatt Austrian-made boiler adds to Vaerta’s production capacity that includes oil and biofuel-fed burners, as well as one of Sweden’s last coal-fired generators, modified in 2010 to run partly on olive pits. The complex will generate enough heat to warm 30 percent of Stockholm’s 900,000 homes as well as meet as much as 8 percent of the city’s electricity consumption, according to data from Fortum and Statistics Sweden. The city, which controls 49.5 percent of the site, wants Vaerta’s coal plant shut before the end of the decade and replaced with the new boiler, according to Katarina Luhr, the vice mayor overseeing environmental issues. Burning biomass will help the Nordic area’s biggest metropolis meet its goal to be fossil-fuel free by 2040, she said. “It’s unacceptable having a coal plant in the city of Stockholm,” Luhr said in a Jan. 23 interview. “It’s important for our brand to show other cities we can do this. We have been able to do it, you can also do it.”
News Article | April 16, 2015
STOCKHOLM, Sweden--(BUSINESS WIRE)--Climeon is rated as one of the top 33 innovative technology companies in Sweden in the annual listing by prestigious business and technology publications, Affärsvärlden and Ny Teknik. The Climeon Ocean™ system, a patented innovation, enables electricity to be extracted from hot water. The technology provides competitive, cost-effective electricity production via waste heat recovery. One Climeon Ocean module can generate 150 KW – enough to heat more than 100 average homes.* “About half the world's energy ends up as waste heat,” says Thomas Öström, CEO of Climeon. “We believe that by using this technology, electricity can be extracted from large volumes of such heat. Today, renewable energy is about 20% of the total global energy supply. The renewable energy market is estimated to be worth hundreds of billion dollars.” The Climeon Ocean technology is scalable and can be implemented in business areas and industries such as heat from engines, heavy industries, and solar, water or geothermal heat. The innovation can replace many TWh of fossil-based electricity. Climeon Ocean uses an optimized and patented process for converting hot water (between 70 and 120 oC) to electricity in a vacuum process. Climeon Ocean is an investment with a relatively short payback period. The system enables companies to save operating cost and to reduce their environmental impact. Viking Line operates a fleet of cruise ferries in the Baltic Sea. Viking Grace, Viking Line's newest ship, is the first ship in the world to use the Climeon Ocean system. Interest in marine applications is large. A system module of 150 kW will generate more than 1 million kWh of electricity annually – by extracting waste heat from the ship’s engines. Just one module saves up to 200 tons of fuel per year. Consequently, it reduces carbon dioxide emissions by up to 400 tons per year. About the 33 list For the eighth consecutive year, Affärsvärlden and Ny Teknik recognize 33 of Sweden’s most promising technology companies. List inclusion criteria are: (i) companies must be at most seven years old; (ii) they must be based on a technological innovation with international potential, and (iii) they must demonstrate that they want to change their industries’ playing rules (e.g., to create entirely new markets). * As per Swedish Energy Agency, the average house in Sweden annually consumes 12,200 kWh for heating. Climeon’s vision is to make the world a better place via brilliant innovations. Its mission is to challenge established truths – to make customers more successful. Thanks to its unrivalled Climeon Ocean system, Climeon delivers return on investment via a solution that cost-effectively converts waste heat to electricity. This information was brought to you by Cision http://news.cision.com
News Article | June 15, 2015
GÖTEBORG, Sweden--(BUSINESS WIRE)--Gothenburg is launching the public transport of the future. Gothenburg’s first route for electric buses will open on 15 June. The buses are silent and emission-free and run on electricity from wind power and hydropower. The bus route is among the most modern in the world. Among other things, passengers can recharge their phones onboard and enter and exit the bus from indoors. Buses powered completely by renewable energy will now be part of Gothenburg’s public transport system. Bus route 55 has three completely electrically driven buses and seven electric hybrid buses, all of them from Volvo Buses. The buses on the route, which runs from Chalmers Johanneberg to Chalmers Lindholmen, through the center of Gothenburg, are equipped with onboard wi-fi and phone charging facilities. The buses run on batteries that are quickly recharged with renewable electricity at the terminal stops. The Chalmers Lindholmen stop has an indoor terminal, which is made possible by the fact that the buses are silent and emission-free. “The Volvo Group aims to be the world leader in sustainable transport solutions. A unique collaboration in Gothenburg enables us to launch the electric bus route here and remain a leader in the development of future public transport,” says Niklas Gustafsson, Chief Sustainability Officer, Volvo Group. Bus route 55 is a result of ElectriCity, a collaboration that develops, tests and demonstrates new, attractive sustainable collective transport for the future. In addition to the actual buses, ElectriCity develops and tests new bus stop systems, traffic management systems, safety concepts and energy supply systems. The new electric bus route not only puts Gothenburg on the map for innovative public transport systems, but also opens new possibilities for urban planning. “ElectriCity and route 55 are concrete proof of how Gothenburg is being developed into a denser, more sustainable and open city with attractive public spaces and a rich urban life. The project also demonstrates our ambition and strategy to attract expertise and investment that help reduce environmental impact and develop collaboration between authorities, industry and academia,” says Anneli Hulthén (S) Chair of the City Executive in Gothenburg. It is hoped that the ElectriCity project will encourage use of public transport and prepare the way for more attractive public transport solutions in the Västra Götaland region. ElectriCity is a collaboration between research, industry and society. It focuses on developing, demonstrating and evaluating sustainable public transport solutions for the future. The collaboration is between Volvo Group, Region Västra Götaland, Västtrafik, the City of Gothenburg, Chalmers University of Technology, the Swedish Energy Agency, Johanneberg Science Park, Lindholmen Science Park, Business Region Göteborg, Göteborg Energi, Älvstranden Utveckling, Keolis, Akademiska Hus and Chalmersfastigheter. For more stories from the Volvo Group, please visit http://www.volvogroup.com/globalnews. The Volvo Group is one of the world’s leading manufacturers of trucks, buses, construction equipment and marine and industrial engines. The Group also provides complete solutions for financing and service. The Volvo Group, which employs about 115,000 people, has production facilities in 19 countries and sells its products in more than 190 markets. In 2012 the Volvo Group’s sales amounted to about SEK 304 billion. The Volvo Group is a publicly-held company headquartered in Göteborg, Sweden. Volvo shares are listed on OMX Nordic Exchange Stockholm. For more information, please visit www.volvogroup.com or www.volvogroup.mobi if you are using your mobile phone. This information was brought to you by Cision http://news.cision.com
News Article | May 11, 2015
Public transport of the future is now in place in Swedish Gothenburg! A noiseless and emission-free electric bus operating on renewable electricity, and that stops at Sweden’s first indoor bus stop and allows passengers to charge their mobiles onboard. The Volvo Group and the ElectriCity project invite you to a press conference and a bus trip in connection with the launch of Electric Bus Route 55 in Gothenburg. The press conference will commence with the very first trip on the electric bus from Chalmers Johanneberg to Lindholmen in Gothenburg, where the new indoor bus stop is. After this, the parties involved in the ElectriCity collaboration will present the project and answer questions. A light lunch will be served. Location: Chalmersplatsen 4, followed by the bus trip to Lindholmen Science Park, Gothenburg, Sweden. Participating in the press conference: Håkan Karlsson, Executive Vice President Volvo Group, Anneli Hulthén, Chairman of the Municipal Executive Board, Birgitta Losman, Chairman of the Regional Development Committee, Karin Markides, President and CEO of Chalmers University of Technology. ElectriCity is a collaboration between research, industry and society in which new solutions for sustainable public transport of the future is developed, demonstrated and evaluated. Cooperation partners are the Volvo Group, Västra Götaland Region, Västtrafik, City of Gothenburg, Chalmers University of Technology, the Swedish Energy Agency, Johanneberg Science Park, Lindholmen Science Park, Business Region Gothenburg, Göteborg Energi, Älvstranden Utveckling, Akademiska Hus and Chalmers Fastigheter. The Volvo Group is one of the world’s leading manufacturers of trucks, buses, construction equipment and marine and industrial engines. The Volvo Group also provides complete solutions for financing and service. Volvo, which employs about 100,000 people, has production facilities in 19 countries and sells its products in more than 190 markets. The Volvo Group’s sales amounted to about SEK 283 billion in 2014, and its shares are listed on the Nasdaq Stockholm. For more information, visit www.volvokoncernen.se or www.volvogroup.mobi for those using a mobile phone. This information was brought to you by Cision http://news.cision.com
News Article | May 12, 2015
Abu Dhabi, with 6 percent of global crude reserves, selected GS Energy Corp. of South Korea to join Japan’s Inpex Corp. as the second Asian partner in the Persian Gulf emirate’s biggest onshore oil concession. GS Energy secured a 3 percent stake for 40 years in the venture, it said in a statement. Another South Korean company, Korea National Oil Corp., said it will provide technical support to GS Energy in the project. State-owned Abu Dhabi National Oil Co confirmed the award Wednesday. Inpex won a 5 percent stake in the venture last month. Abu Dhabi is seeking new partners to replace some of the Western companies that pumped oil in the emirate for 75 years until their last production agreement expired in 2014. Adnoc picked Total SA of France for a 10 percent stake in the concession in January. By also selecting Inpex and now GS Energy, Abu Dhabi is for the first time opening its biggest onshore producing fields to investment from companies in Asia, the biggest market for the emirate’s crude. “Asian oil companies have been trying to increase security of supply by buying into production overseas,” Victor Shum, vice president at IHS Inc.’s Asian energy consulting business, said by phone from Singapore. “Middle East producers want to increase demand security, so this meets the needs of both.” Abu Dhabi, the largest emirate in the United Arab Emirates, has pumped crude oil from its onshore fields under agreements with Total, BP Plc, Exxon Mobil Corp., Royal Dutch Shell Plc and Portugal’s Partex Oil & Gas -- or their predecessors -- since January 1939. Adnoc joined the group in the 1970s, forming the partnership that extracted Murban crude, the U.A.E.’s main blend, until the concession agreement expired in January 2014. Total is so far the only legacy partner to have retained a share in the onshore areas. Exxon Chief Executive Rex Tillerson said in March that his company decided against bidding because the fields are “low margin.” Shell submitted a revised bid for a 10 percent stake, two people with knowledge of the matter said in February. BP has declined to comment on the bidding process. Some bids from international oil companies didn’t meet Adnoc’s conditions, the state producer said in an April 20 statement citing comments by Director General Abdulla Nasser Al Suwaidi. He didn’t identify any of the companies. GS Energy agreed to pay Adnoc a signing bonus of $670 million, according to a regulatory filing in Seoul. State-run Korea National Oil has the right to buy as much as 30 percent of GS Energy’s stake over the next five years, Joo Hyoung In, a KNOC spokesman based in Ulsan, South Korea, said Wednesday by phone. The Korean companies will gain access to about 50,000 barrels of crude a day, GS Energy said. Their contract will be dated from January 2014, according to Adnoc. “Bringing in Asian companies, who often have a somewhat lower cost base, puts pressure on the big Western majors and mid-size firms to provide maximum value and technology at the lowest possible cost,” said Samuel Ciszuk, a supply researcher at the Swedish Energy Agency. Abu Dhabi is raising production capacity amid a crude glut that contributed to a price collapse of almost 50 percent last year. The Organization of Petroleum Exporting Countries, of which the U.A.E. is the third-largest producer, plans to meet June 5 to assess the market after leaving its output ceiling unchanged in November. Brent crude, a global benchmark, fell as much as 0.7 percent Thursday and was trading at $66.83 a barrel at 2:41 p.m. in London. Adnoc is spending about $22 billion to increase capacity for onshore oil and gas production and exports, Omar Suwaina Al Suwaidi, the company’s deputy director for strategy, said Nov. 11. Onshore crude-production capacity will reach 1.8 million barrels a day in 2017 compared with 1.6 million currently, Adnoc has said previously. Abu Dhabi plans to boost its total production capacity, onshore and offshore, to 3.5 million barrels a day in 2017 from about 3 million now.
News Article | March 18, 2015
BRUSSELS, March 17, 2015 /PRNewswire/ -- LED lamps from quality suppliers are rapidly reducing in price – and improving in energy efficiency – far beyond industry and expert forecasts. Additionally, major consumer and professional lighting companies like IKEA and Erco have announced their intention to switch to 100% LED by 2016. In advance of a vote on whether to delay a regulation that would facilitate full market transition to LEDs, CLASP, the Danish Energy Agency, and Energy Piano have provided a thorough analysis of these surprising developments in the European lighting market to the European Commission and Consultation Forum. Halogen lamps have become the most popular lighting choice among European consumers, according to a 2014 analysis by CLASP, in collaboration with the Swedish Energy Agency, the Belgian Federal Ministry for Health, Food Chain Safety & Environment, and eceee. With 477% sales growth across Europe between 2007 and 2013, halogen sales were considerably higher than expected by the European Commission. At the same time, consumers shunned compact fluorescent lamps (CFLs), with sales of energy-efficient CFLs in decline since 2010. This unexpected shift away from CFL in favour of halogen undercut the anticipated energy savings from phasing out incandescent lamps. Now, European policy leaders are making a decision whether to keep, amend or delay the final stage of an existing law that would shift the market totally from halogen to LED lamps starting in September 2016. According to a new analysis by CLASP, the Danish Energy Agency, and Energy Piano, LED lamps have already become much more affordable and energy efficient than was expected. LED lamps found on the market today are achieving price points that were only expected in 2020, 2022, 2024 and 2025. This exciting 5-11 year acceleration in affordability of LED lamps from major European manufacturers means that consumers experience very attractive payback periods of less than 1 year, if the lamps are installed in a household socket used 3 hours per day. Concerns that LED lamps may be too heavy, too big or emit poor quality light are issues that have been – and are continuing to be addressed – by manufacturers. The CLASP market research report highlights that there are LED lamps available that meet the shape, size and light quality of incandescent and halogen lamps. The report also notes that consumer and professional lighting companies are switching: the global retailer IKEA announced they will only sell LED lamps starting in 2016. Erco, a professional luminaire manufacturer, announced that starting in January 2015 they will only supply luminaires that use LED light sources. According to CLASP CEO Christine Egan, "Internationally, LED markets are evolving at warp speed, in terms of price and product quality. In Europe, some quality brand LED lamps on the market today are at price points that were only expected to be in shops in 2025, with features and characteristics that consumers care about. This new evidence should be very interesting to policymakers working on these issues." The report also estimates that the Commission's proposal to delay the policy measure by two years will result in 33 TWh of lost electricity savings over a ten year period from 2016 through 2026. These savings represent approximately €6.6 billion Euro in higher electricity bills, and in terms of volume is approximately equal to Denmark's current annual electricity consumption. "Lighting accounts for a large share of domestic energy consumption (12% of average Danish household electrical consumption)", said Henrik Andersen, Head of division at the Danish Energy Agency, one of the co-sponsors of the study. "The report finds price points in today's market from quality brands that were only expected in 2025. For half of the products, the current price level is 5-11 years ahead of expert forecasts. This on-going reduction in LED lamp prices will enable mass market penetration. European consumers then can experience reductions in their energy bills while enjoying beautiful, high quality light from LED lamps." Furthermore, the study contemplates a scenario where the regulation takes effect in 2016 but is increased to A-class to avoid any B-class halogen lamps entering the European market. For this scenario, the energy savings would be 79 TWh more than the Commission's proposal – or nearly €15.8 billion Euro over ten years. The study concludes that the LED market has started to become a mass market in Europe, and this will continue to develop between now and September 2016, when the policy measure is currently scheduled to take effect. "The upcoming decision for European policy-makers on whether or not to delay the final stage of the phase-out of incandescent lighting is critical," remarked Michael Scholand of CLASP Europe, one of the report co-authors. "By keeping the 2016 date, Europe will accelerate innovation in LED lighting and we can expect faster price reductions, benefitting consumers sooner than if the phase-out was delayed." An independent, non-profit organisation, CLASP improves the environmental and energy performance of the appliances and related systems we use every day, lessening their impacts on people and the world around us. CLASP develops and shares practical and transformative policy and market solutions in collaboration with global experts and local stakeholders. We are the leading international resource and voice for energy efficiency standards and labels (S&L) for appliances, lighting, and equipment. Since 1999, CLASP has worked in over 50 countries on 6 continents pursuing every aspect of appliance energy efficiency, from helping structure new policies to evaluating existing programs. Please visit clasponline.org.
News Article | November 22, 2016
Sweden says it wants to stop burning fossil fuels to make electricity by the year 2040. Policies and goals are wonderful things, but taking action to implement those policies and goals is where the hard work comes into play. Now Sweden is putting its money where its mouth is. It has announced a government subsidy that will cover 60% of the cost of installing a residential energy storage system up to a maximum of 50,000 kroner or $5,600. The credit applies to the battery, wiring, control systems, smart energy hub, and installation work for homes with rooftop solar systems. Andreas Gustafsson, program manager for the research and innovation department of the Swedish Energy Agency tells Renewable Energy World, “The scheme represents a complementary support system to the existing scheme supporting solar PV generation in Sweden. It’s one step, but an important step towards establishing a smart, distributed grid based around clean, renewable energy.” “It’s expected that in supporting the installation of batteries, we’ll enable two outcomes — one to enable better use of solar PV generation systems,” Gustafsson says. “The second is to help establish smarter, more flexible grids that can contribute to stabilize the grid against fluctuations in frequency and voltage. In this context, it’s important to have systems for storing energy, rather than simply pumping excess electricity into the grid, only to buy it back at a later date when you have a demand.” He believes the new incentive program will be attractive to what he calls “prosumers” — private persons or companies using rooftop solar for their own energy needs. Johan Lindahl, a spokesperson for Swedish Solar Energy says, “Solar PV is a rapidly expanding market in Sweden. It’s in a good position to grow from a small position currently. Last year, for instance, solar PV capacity grew by 60%. We’re around 128 MW now.” In general, there is a growing interest for PV in Sweden and the general public is very positive towards the technology,” he says. A recent survey found that about 20% Swedish homeowners were considering investing in rooftop solar or a small wind turbine. Sweden’s new incentive program is similar to one in place in Germany that saw 19,000 home solar and battery storage systems installed since it began. That program has recently been extended through 2108. Whether Sweden can duplicate that success remains to be seen. “Energy storage on this scale is new for Sweden.” says Andreas Gustafson. “There’s very little to no home energy storage at the moment. Hopefully though, we can look forward to success here, and new companies and jobs to come along with introduction of these storage solutions.” The incentive program will be in effect until December 31, 2019. Buy a cool T-shirt or mug in the CleanTechnica store! Keep up to date with all the hottest cleantech news by subscribing to our (free) cleantech daily newsletter or weekly newsletter, or keep an eye on sector-specific news by getting our (also free) solar energy newsletter, electric vehicle newsletter, or wind energy newsletter.