Annual Report 2019

Decisive Power.

The year 2019 was a year of strong renewal for Pohjolan Voima. We started the work on our strategy together with our employees and customers at the very beginning of the year. The Group’s Board of Directors ratified the new strategy in June. In accordance with the strategy, our duty at Pohjolan Voima is to create decisive power to strengthen competitiveness and contribute to a better tomorrow.

Pohjolan Voima’s essence and profound significance are linked to our role in society and the curbing of climate change. By producing electricity and heat at cost price, we do our part to ensure that our customers – the industry, other energy companies and municipalities – will succeed. Indirectly, we create jobs and wellbeing in Finland. At present, we produce nearly 20% of all the electricity in Finland, and 94% of the electricity we produce is already carbon neutral – we expect to exceed the limit of 95% this year. With our carbon neutral production, we do our part in creating a cleaner world and assist our customers in reducing their CO2 emissions.

Three themes and dozens of development projects

Pohjolan Voima’s future is based on three strategic themes: market-based progress towards carbon neutrality, seeking for a competitive edge from the development of regulating skills and aiming for top asset management expertise.

In addition, all of our choices and decisions aim at curbing climate change. We participate in the development of nuclear power production, restrict peat and fossil fuels as startup and backup fuels whenever the market situation allows and maintain our readiness to introduce new solutions on an industrial scale.

In future, fluctuations in electricity production will be even faster and greater than now. Flexibility and the ability to balance production based on the demand will become even more valuable capabilities. The increasing share of wind and solar power, the volume of which fluctuate depending on the weather conditions, in the electricity system will further speed up this development. We develop the regulation capability of our production with the help of market information. We increase the value of regulation by means of investments.

We hold in our hands a great asset, and we care for it in the best possible way. Here, production asset does not refer only to our systems, but everything we need for our operations. We perform effective maintenance actions and carry out timely investments. We use smart systems, digitisation and knowledge-based management in our operations. We will continue to strengthen our networks and partnerships, because together we are more.

We have initiated a host of projects to implement the strategy. In 2019, we had more than forty ongoing development projects with which we aim for new solutions and strive to decrease our emissions and lifecycle costs, as well as to improve our operational reliability, efficiency and flexibility.

Improved regulation capability and cooperation to revive migratory fish stocks

In terms of hydropower, we maintain the good condition of our plants, minimise the risk of environmental damage and improve the capability of our plants to support the functionality of the electricity system by providing regulating power. In 2019, we completed a reform of the electricity and automation systems at the Raasakka power plant and made a decision to overhaul the Jumisko hydropower plant in the Kemijoki river in 2021. We introduced a whole new type of turbine regulator at our three hydropower plants in the Iijoki river. The regulators enable much faster and more accurate control of the electricity production. The innovative product was created in cooperation with the University of Oulu.

Hydropower production has regional and local effects on water systems and fish stocks. We have several ongoing cooperation projects on management of the aquatic environment and revival of migratory fish stocks. Several cooperation partners signed an agreement on the Iijoki river as a continuation to a waterway vision project called Iijoen otva that was managed by the Oulu Regional Council and ended in 2018. With the agreement, the parties agreed on the implementation of an Iijoki river vision and action plan.

PVO-Vesivoima participates in Finland’s largest, three-year migratory fish spearhead project in 2017–2020. The project’s action plan includes building a fishway at the Raasakka power plant, creating downward migration solutions for smolt (young salmon and trout), implementing a fry planting programme, as well as transferring fish and performing related actions at the old riverbeds of Raasakka and Maalismaa. The first fence to guide smolt in Finland was installed at our Haapakoski power plant. We are also involved in the development of the old natural riverbed at Raasakka with local partners and participate in the revival of fish stocks in the Kemijoki river.

Managing the entire production plant lifecycle

Pohjolan Voima’s combined heat and power plants produce district heat and process steam for local industry and communities, as well as electricity. We invest in solutions which improve the competitiveness, flexibility and efficiency of our plants’ energy production and reduce emissions at the same time. Our goal is to care for our power plants throughout their lifecycle.

The Laanilan Voima biopower plant underwent extensive annual maintenance in 2019. The goal was ensuring availability and safe operation of the power plant. Adjustments of the combustion conditions in the boilers of the Kaukaan Voima and Kymin Voima power plants were made using significantly improved process management technology. The cost-efficient solution reduces the generation of nitrogen oxides in the boilers and improves the power plants’ energy efficiency.

A project aiming at better management and thus increased utilisation of recycled fuels is ongoing in Hämeenkyrön Voima. We use data, new sensors and analysis tools to improve predictability and fuel management. A pilot project by Rauman Biovoima uses proactive condition monitoring, data analysis and machine learning to detect potential future problems and thus avoid production interruptions.

Power plant lifecycle management also includes end-of-life care. We started the demolition of the coal-fired power plants in Kristiinankaupunki and Tahkoluoto, Pori. The goal is to have the plants completely demolished by the end of 2020. The final decision on the decommissioning of the plants was influenced by our commitment in increasing carbon neutral production. Most of the demolition waste will be recycled. New use for the power plant area in Kristiinankaupunki is being developed in cooperation with local companies.

Finland’s most significant contribution to the climate effort will soon start production operations in Olkiluoto

The Government granted the Olkiluoto 3 EPR plant unit an operating licence in March 2019. According to a schedule updated by the plant supplier in December, fuel will be loaded in the reactor of the OL3 EPR plant unit in June 2020, the plant unit will be connected to the national grid for the first time in November 2020 and regular electricity production will start in March 2021. Posiva has also started the construction of a production facility for the handling of spent nuclear fuel at Olkiluoto. The cornerstone for the Posiva encapsulation plant was laid on 23 September.

Strengthening safety culture

Responsible operations are part of Pohjolan Voima’s strategic outlook. Our strong values – skilfully, boldly, together – create the foundation for our corporate responsibility. For Pohjolan Voima, responsibility means the responsible management of financial, social and environmental matters. In 2019, the focus areas of our responsibility work included the development of safety management, responsibility in the value chain and the circular economy. The strengthening of the safety culture could be seen as improved power of perception of Pohjolan Voima’s personnel: we achieved our safety, environmental and energy efficiency observation goals.

Dedicated work together

During the current major changes of the energy industry, success is enabled by employees who work together for a common goal. According to personnel survey results, one of our strengths is good team spirit. Due to the good results of our personnel satisfaction surveys, we received an honourable mention in the Most Inspiring Employers in Finland 2019 competition – a huge achievement from our energetic, competent and committed employees.

All in all, we did well in this field in 2019. I’m pleased that our customer satisfaction is at a high level and our cooperation is smooth. Pohjolan Voima’s strengths are based on its strong network that includes not only our customers, but also our cooperation partners. My thanks for a successful year go to all of Pohjolan Voima’s employees, customers and partners. Together we are more – that is why continuous development of partnerships and cooperation will remain a basic prerequisite for our future success as well.

Political decision-making influences the energy industry much more than many other industries. In addition to the market, the changes in our operating environment depend on the government programme and the new Commission’s plans. We expect decision-makers both in Finland and in the EU to be consistent and predictable. Societies are being electrified at a fast pace, which causes stronger integration between different industries. For the solutions of the future to remain efficient also in terms of costs, decision-makers must be able to understand the impact of the decisions they make.

The energy industry is becoming a more and more pivotal industry. We at Pohjolan Voima are ready for the future challenges. Pohjolan Voima’s employees are strong-minded, and we will openly embrace future challenges. We invest in new, smarter thinking and operations. We make small and larger decisions, even surprising ones, that create solutions and relevance. We are a bold and honest company, and we are a strong and skilled team.

Decisive Power – Skilfully. Boldly. Together.

Ilkka Tykkyläinen
President and CEO, Pohjolan Voima Oyj