Turkuenergia

EUR 253.0 million

turnover

EUR 21.7 million

operating profit

EUR 16.0 million

investments

Turku Energia Group's result improved: 80 per cent of district heat was already produced by renewable energy sources

Turku Energia Group's operating profit improved and turnover fell in comparison to the previous year. Electricity consumption in Turku decreased by 1.8 per cent compared to the previous year. The warm winter months decreased the demand for district heat, but as a result of efficient basic production, the profitability of district heat improved from the previous year. The company will continue to invest in renewable energy. At the end of 2020, 80 per cent (2019: 61 per cent) of the district heat was already being produced using renewable energy sources. The continuity of electricity and heat supply as well as customer satisfaction remained at a good level.

Turku Energia Group’s turnover fell from the previous year and was EUR 253.0 million (2019: EUR 276.8 million). The Group's profit improved, totalling EUR 21.7 million (EUR 18.5 million). The Group invested EUR 16.0 million (EUR 15.3 million) in the transfer capacity of the networks and in improving and maintaining the reliability of supply with respect to the electricity and heat networks. The consumer-customers of Turku Energia were the second most satisfied in the industry, according to an Electricity Retail Supply survey carried out by EPSI Rating. The security of both electricity and the heat supply was at an excellent level in 2020.

Turku Energia Group's strategy was updated during 2020 for the period of 2021–2023, and the company prepared an environment and climate programme for 2021–2023.

The COVID-19 situation, which commenced in March, brought about changes to the Group's working methods. As a result of strict guidelines, the COVID-19 chains of infection were avoided in the Group during the year. The customer service point located in Linnankatu Street was closed until further notice due to COVID-19.

Turnover, EUR millions

Operating profit, EUR millions

Investments, EUR millions

Turku Energia Sähköverkot reduced its transmission price during the year

Electricity transmission to customers in the company's home area amounted to 1476 GWh (2019: 1503 GWh) and to other system operators 475 GWh (2019: 479 GWh). New electricity accounting points totalled 2,362, and at the end of the year the accounting points amounted to a total of 92,829. The quality of electricity distribution remained at a good level. The calculated interruption per electricity transmission customer was 11.5 minutes.

Grid company investments were concentrated on improving and maintaining the transmission capacity and security of supply of the electricity network. Investments totalled EUR 8.6 million (EUR 9.3 million).

Turku Energia Sähköverkot Oy reduced the basic price of electricity transmission for its customers by 50 per cent for a six-month period from 1 April to 30 September 2020. Thereafter, in November it notified that it will reduce its transmission prices as of 1 January 2021. Depending on the type of user and the consumption of electricity, the effect of the price reduction with tax is on average four per cent. Turku Energia Sähköverkot Oy’s transmission prices continue to be among the lowest in a nationwide comparison.

80 percent of district heat already produced with renewables

Sales of district heat amounted to 1,715 GWh (2019: 1898 Gwh), of which 80 per cent was already being produced using renewable energy. The amount of renewable energy in the generation of district heat was, for instance, increased by a flue gas condenser which was introduced at the Naantali power station by Turku Energia's affiliated company Turun Seudun Energiantuotanto Oy (TSE), and which generates heat that mainly replaces the heat previously generated with coal. The heating business investments were targeted at expanding the heat networks and equipment procurement. Investments totalled EUR 6.1 million (EUR 4.1 million).

Most of the district heat was sourced from Turun Seudun Energiantuotanto Oy’s Naantali power station, the Oriketo bioheat plant and the Kakola heat pumps. The proportion of heat generated using wood-based biofuels, heat pump solutions, heat recovery, biogas as well as other renewable forms of energy increased significantly, accounting for 80 per cent (61 per cent) of the acquired heat. The proportion of acquired heat generated with coal diminished to 14 per cent (32 per cent). District cooling and steam were supplied as planned. The continuity of supply to customers of Turku Energia’s heat and cooling remained at an extremely high level in 2020. The calculated interruption per heat customer was an average of 54 minutes.

The downward price development of district heat continued due to the investments made in the last two decades into renewable energy production, improved network efficiency, and development work performed with heat operation and maintenance – i.e. optimisation of production.

Distribution of electricity, GWh

Sales of district heat, GWh

Coronavirus slowed down investment decisions of customer companies

The Coronavirus epidemic slowed down the investment decisions of companies, particularly with reference to solar panels as well as with, to some extent, charging solutions for electric cars. The singlemost significant delivery of charging points for electric cars and related co-operation agreement was concluded with Toriparkki, where 20 charging points for electric cars were delivered at the end of 2020. During the year, it was decided to update the product selection for consumers to be produced only with renewable energy sources.

In electricity production, the share of renewables was increased by acquiring wind power generation through the company's affiliate company, Suomen Hyötytuuli Oy, from the Alajoki-Peuranlinna wind farm project. After completion of the project, the share of wind power will be approximately 28 per cent of Turku Energia's total annual electricity production.

Turku Energia transferred its customer services with a business transfer to Eniro Finland in November and concluded a service agreement to acquire its customer services from Eniro Finland. The tightening competition in electricity sales and measures to improve profitability, as well as expansion of service hours, were the reasons behind the transfer of business.

Service business

The Urakointipalvelut (Contracting Services) business unit underwent a change of name to Verkostotekniikka (Grid Technology), entering into force in early 2021. In accordance with its strategy, the unit concentrated on supporting Turku Energia Group’s electricity transmission processes as well as providing street lighting and traffic lights-based infrastructure services. The unit’s largest customers were Turku Energia Sähköverkot Oy and the City of Turku.

The Tuotantopalvelut (Production Services) business generates operating and maintenance services for Turun Seudun Energiantuotanto Oy, and within the Group for the Lämpö (Heat) unit. The year 2020 was the unit’s second. The unit reached its operational goals. The availability of networks and the generation plants operated by the unit was at a good level.

Future outlook

Turku Energia Group’s operating result is expected to remain at a favourable level in 2021. Demand for electricity is influenced by economic cycles and annual temperature fluctuations.

The low retail price level of electricity still burdens the profitability of electricity generation, and according to the derivatives market forecast, the low price level will continue.

The Energy Authority's new approach to the regulation of the energy yield level of the electrical grid will considerably lower the yield level of the grid in the next few years, and will probably result in critical examination and possible postponement further to the future of electrical power network investments.

The journey towards coal-free power generation is continued together with Turku Energia's affiliate company, Turun Seudun Energiantuotanto Oy. Customer demands and needs are met by developing new products and services for the heating market.