EPV Energy Ltd (EPV) is a company specialised in energy acquisition and it operates on an absorption costing principle. The aim is to supply the owners with competitive electricity and to ensure inexpensive power procurement in a changing operating environment. The company’s strategic objective is that the energy acquisition should be both low-emission and competitive in the long term. The energy acquisition is mainly transacted through the generation shares owned by the company. EPV’s acquired amount of electricity in 2016 was 4,429 (3,978) GWh. This corresponds to 5.2 (4.8) per cent of the electricity consumption in Finland.


Operating environment

According to preliminary statistics, 390 (381) TWh of electricity was consumed in the Nordic countries in 2016. The growth of consumption was a result of lower temperatures than the previous year and a structural rise in demand.

In 2016, Finnish electricity consumption was 85.1 (82.5) TWh, which meant an increase of approximately 3.1 per cent compared to 2015. The industrial share of the consumed electricity was 46.7 per cent and other consumption 53.3 per cent. Last year, industrial consumption increased by 1.6 per cent and consumption in other sectors by 4.6 per cent. The losses stood for approximately 3.0 per cent of the electricity consumption.

In 2016, a record-breaking 22.3 per cent of power procurement was covered by imports and 77.7 per cent by domestic generation. Combined generation of power and heat (CHP) covered approximately 24 per cent of the consumed electricity, nuclear power 26, hydropower 18, and coal and other condensing power 5 per cent. The share of wind power was 4 per cent. The electricity imported from Sweden declined slightly from the previous year, while electricity imported from Russia increased by 50 per cent. The net exports of electricity to Estonia halved, amounting to 2.4 TWh. As a result of these changes, Finnish imports of electricity increased by 16 per cent compared to the previous year, amounting to 19.0 TWh.

In 2016, the snow and water reserves, i.e. the hydrological balance, of the Nordic countries fluctuated below and above the long-term average. The fluctuations relating to hydropower generation are clearly depicted in the fact that, over the year, the hydrological balance went from up to 12 TWh above the long-term average down to 13 TWh below the long-term average. At the beginning of the year, the reserves were 12 TWh above the average level and at the end of the year 5 TWh below the average level. By the turn of the year, Nordic water reserves were approximately 77 TWh in total.

In 2016, CO2 emissions from energy generation were 6.9 million tons, which is 8 per cent more than the previous year. The growth of CO2 emissions was due to the increase in the use of coal in electricity generation. Up to 78 per cent of the electricity generated in Finland was free from CO2 emissions. The share of renewable energy sources was 45 per cent of the electricity generated, and domestic fuels covered 50 per cent.


Electricity generation in 2016 at the power plants of the partnership company Vaskiluodon Voima Oy (50%) was 1,566 (1,329) GWh. A total of 846 (759) GWh of district heating was generated. On the basis of its interest, EPV acquired a total of 755 (640) GWh of electrical energy. The company implemented a reformation of power plant running in 2016. The reform was carried out by organising employee cooperation negotiations, which concerned the entire personnel and whose aim was to achieve a more efficient cost structure.

The total output of the Olkiluoto 1 and 2 power plants of the associated company Teollisuuden Voima Oyj (TVO) in 2016 was 14,348 (14,261) GWh. In all of 2016, the plants had a total of 3 fairly short stoppages, while repairs took place. Otherwise, the units worked as normal. EPV’s direct interest in Teollisuuden Voima was 6.6 per cent, and 984 (947) GWh of energy was acquired in proportion to the share. The acquisition includes the condensing power generation share from Meri-Pori.

The technological building solutions at the Olkiluoto 3 unit currently under construction have mostly been completed. The electrical, automation and mechanical installations are still in progress. The trial running of the automation systems was started in January 2016. The testing of the process systems commenced in April when an application for the operating licence was submitted to the Ministry of Economic Affairs and Employment. The number of employees at the OL3 construction site at the end of the year was approximately 2,000.

The partnership company Pohjolan Voima Oy (PVO) is a power procurement company which operates on an absorption costing principle, supplying electricity to its owners at cost price. EPV’s interest in Pohjolan Voima Oy is 5.5 (6.5) per cent and a total of 553 (571) GWh of electricity was acquired accordingly.

The PVO Group’s oil-fired condensing power plants Kristiina 1 and Vaskiluoto 3 have been discontinued as their environmental permits ran out. In 2015, it was also decided to shut down the generating operations at the coal-fired condensing plants of PVO, due to their unprofitability.

The Norwegian hydroelectric power plant of the partnership company Rapid Power Oy (50%) supplied an exceptionally high quantity of electricity in 2016 due to the excellent reserves at the beginning of the year and plentiful rainfall throughout the year. Since September, the power plant’s two generators have had problems with their stators, and consequently restrictions have been set for adjusting the machines and switching them on and off. The other two generators are available as normal. In 2016, the total electricity supply to EPV was 891 (603) GWh.

Voimapiha Oy (17%) generates hydropower electricity in Sweden. Voimapiha holds a share of 25.7 per cent in Kraftgården Ab. The hydropower plants owned by Kraftgården are located on the River Indalsälven, one of the most significant hydropower reserves in Sweden, and the company has approximately 161 MW of generation power, which corresponds to approximately 862 GWh of average annual generation.  During its third year of operation, Voimapiha Oy supplied EPV with 247 (308) GWh of hydropower electricity generated in Sweden.  The real estate tax on hydropower plants will be reduced in four stages in Sweden by 2020 from the current 2.8 per cent to 0.5 per cent. Also, legislative reform is being prepared in Sweden and will be examined by the Parliament in the autumn of 2017.

A subsidiary of EPV (100%), Tornion Voima Oy generates electricity and heat in connection with the steelworks in Tornio. The plant delivers combined generation electricity to EPV, district heating and fabrication steam to the Tornio steelworks and district heating to Tornion Energia Oy. The total electricity supply for EPV was 156 (165) GWh.

Raahen Voima Oy is EPV’s partnership company (25%), which generates electricity and heat by the Raahe steelworks. Of the energy generated at the plant, cogeneration electricity is delivered to EPV, electricity, district heat and process steam to Raahe steelworks and electricity, heat and district heat to Raahen Energia Oy. EPV became a shareholder and deliveries started on 1 April 2014, and the company’s new CHP power plant was adopted in the summer of 2016. The operations have run as planned. In 2016, the total electricity supply for EPV was 136 (134) GWh.

EPV Tuulivoima Oy (100%) focuses on building wind power farms and generating wind electricity in the coastal areas of Ostrobothnia and inland. EPV Tuulivoima’s first wind power farm with its 16 turbines has been in operation in the Torkkola village in Vaasa since the beginning of 2015.  The company’s second wind power farm investment, comprising 17 turbines, has been completed and was put in operation in Santavuori, Ilmajoki in the summer of 2016. A third wind power farm is under construction in Metsälä, Kristinestad. This 34 turbine farm will begin its operations at the end of 2017. Vestas supplies the turbines for the wind power farm, and the investment is estimated at a total value of MEUR 200. EPV Tuulivoima holds a considerable number of legally valid building permits and the company is currently waiting to learn about the forthcoming subsidy scheme before making any decisions about them. In 2016, the total electricity supply for EPV was 245 (144) GWh.

The seventh year of generation for the Puuska wind power farm of Rajakiiri Oy (65.1%), located in Tornio, was materially lower in output than the average year. This was mainly due to poor wind conditions over the whole year. For example, the company’s older wind farm (Puuska 1) generated 75 (95) GWh of electricity, which corresponds to approximately 2,590 (3,300) h/a full load hours. The total electricity generation of the company was 115 (117) GWh, of which 72 (71) GWh were supplied to EPV.

Suomen Merituuli Oy is an associated company, the objective of which is to build future offshore wind power plants in the Gulf of Finland and the Bothnian Sea. The company has development projects for offshore wind power in the Ingå and Sideby areas. EPV’s interest in the company is 50 per cent.

Regional grid company

The subsidiary EPV Alueverkko Oy (100%) practices electricity transmission and network operations mainly in the power transmission network rented from its parent company. The amount of energy transmitted for consumption via EPA’s transmission network in 2016 was 7,120 (7,018) GWh, slightly more than the previous year. Several new network projects were completed during the year, and network transmission losses (10.9 GWh) have remained at the same level as the previous year.

The completed financial year was the first year of the Energy Market Authority’s fourth regulatory period for network operations (2016–2019). From the point of view of network operations, the new regulatory model includes positive reforms to the specification of the WACC percentage and the units of network components, mainly for power lines. The as yet unconfirmed yield determinations of the previous third regulatory period (2012–2015) demonstrate that EPA under-produced, although for network operations, the third regulatory period was challenging, because the Finnish government’s 10-year bond interest rate used as the basis for permissible yield continued its decline.

Other companies

EPV Energy Ltd’s subsidiary Suomen Energiavarat Oy was founded for the purpose of, as a shareholder in Vapo Oy, developing Vapo’s operations with the strategic goal to increase the ownership value, and to primarily aim the resources at the generation of domestic fuels and the development of new uses for peat.

The purpose of EPV Bioturve Oy (100%) is to acquire land areas suitable for peat production in the regions of Ostrobothnia and South Ostrobothnia and to prepare these areas for peat production. Production at the Vähäneva site in Laihia has proceeded according to plan and the preparation of the marsh in Hangasneva, Seinäjoki has continued. When ready, the production area will total approximately 280 hectares.   During the last accounting period, the company has also actively acquired bioenergy within its operating area.

The purpose of EPV Tase Oy (100%) is to provide balance-related services for EPV’s owners and the generation companies owned, entirely or partly, by EPV. The company’s operations during the accounting period lived up to expectations.

EPV Teollisuusverkot Oy (90%) manages the transmission operations of the 110 kV high-voltage power lines in Röyttä, Tornio. EPV Alueverkko Oy manages the operative activities of the network.

The subsidiary Vaskiluodon Teollisuuskiinteistöt Oy operates in the rental of industrial, office and storage facilities. The facilities are located in a reserve area for power generation.

Manga LNG Oy (5%) was established in 2013. The long-term purpose of the company is to deliver competitive liquefied natural gas to its shareholders. The decision to invest in constructing an LNG terminal in Tornio was made in December 2014. In 2016, the construction of the terminal has proceeded as planned. Gas deliveries to customers are estimated to commence at the beginning of 2018.


The turnover of the EPV Energy Group was MEUR 270.7 (268.2). The turnover share of the electricity sales was MEUR 188.4 (200.7) and of the remaining operations MEUR 82.2 (67.5). The increased turnover is due to the increased wind power generation and the growth of network operations and biofuel sales.

The business result of the Group was profitable by MEUR 8.4 (20.1). The net financing costs of the financial year were MEUR 4.7 (4.4). According to the financial statement, the profit was MEUR 1.6 (11.9).

EPV Energy Ltd operates according to the absorption costing principle. The shareholders pay for the variable costs according to the supplied amounts of energy and for the fixed costs in relation to their holdings, regardless of whether the power share has been utilised or not. Due to this operational principle, presenting economic indexes is irrelevant for understanding the operations, the financial position or the result.


The grand total of the Group’s balance increased to MEUR 719.8 (711.5). Non-current liabilities were MEUR 280.7 (268.6) and current liabilities MEUR 71.7 (63.5). By the end of the year, the solvency ratio of the Group was 49.1 (51.6) per cent, which means that the target level set by the company was achieved.

The liquidity of the Group was good all year. By the end of the year, there was a total of MEUR 71.2 (40.6) in liquid assets and investments. By the end of the year, the unused stand-by credit amounted to more than MEUR 80.

The total net investments of the Group were MEUR 54.6 (113.2). The investments in tangible and intangible assets amounted to MEUR 61.9. The acquisitions of shares were MEUR 1.6. The investments were financed by taking out long-term loans of MEUR 20.2 and by issuing shares for MEUR 40.8.

The interest rate risk has been hedged through interest rate swap agreements.

On 13 December 2016, the Accounting Board issued Opinion 1963/2016 on the accounting practices for derivatives and the new requirements. The resolution meant considerably stricter requirements for documentation on derivatives acquired with the purpose of hedging. In the EPV Group, the information given in the notes on the accounts on hedging instruments has been increased, compared to previous practices.



Shareholders’ interests at the end of 2016 were as follows:

Alajärven Sähkö Oy1,391,35
Helen Oy6,456,73
Imatran Seudun Sähkö Oy0,350,35
Jylhän Sähköosuuskunta4,074,06
Järviseudun Sähkövoiman Kuntayhtymä1,681,68
Kaakon Energia Oy0,370,36
KSS Energia Oy0,620,57
Kumera Oy0,310,30
Kymppivoima Oy8,838,65
Lahti Energia Oy8,428,07
Lehtimäen Sähkö Oy0,570,57
Oulun Energia Oy1,631,13
Outokumpu Oyj1,471,53
Oy Perhonjoki Ab1,781,77
Rauman Energia Oy0,850,74
Seinäjoen Energia Oy10,5510,51
Vaasan Sähkö Oy41,3542,36
Vantaan Energia Oy8,328,29
Vimpelin Voima Oy0,480,47
Äänekosken Energia Oy0,510,49

General Shareholders’ Meetings

The Ordinary General Shareholders’ Meeting of 2016 was assembled on 31 March 2016. The issues belonging to the Ordinary General Meeting were discussed.

At the Extraordinary General Shareholders’ Meeting on 28 June 2016, the changes in the company’s internal cost units and the Board of Directors’ proposal of reducing the share premium account and refunding capital to the F series shareholders were discussed.

Board of Directors

In 2016, the Ordinary Members of the Board elected in the Ordinary General Meeting were Olli Arola, Miapetra Kumpula-Natri, Ahti Källi, Hannu Linna, Pekka Manninen, Jorma Rasinmäki, Anders Renvall, Eero Seesvaara, Joakim Strand and Markku Vartia.

The Deputy Members of the Board were Martti Haapamäki, Juha Häkkinen, Andreas Rasmus, Ari Saukkonen and Jukka Ylitalo

The Chairman of the Board was Miapetra Kumpula-Natri and the Vice Chairman Eero Seesvaara.


The CEO was M. Sc. Rami Vuola.


In the General Meeting, the audit firm Ernst & Young Oy was elected Ordinary Auditors for the period until the Ordinary General Meeting in 2017, with Mikko Rytilahti (CA) and Tatu Huhtala (CA) as main responsible Auditors and Ari Lehto (CA) and Kristian Berg (CA) as Vice Auditors.


The central responsibilities of the personnel include power procurement and the efficient management of power plant and network operational assets. The objective is to create added value for the company’s shareholders by governing the assets and supervising the operational entities connected to these. Maintaining the know-how of the personnel plays a key role in ensuring the continuous development of our operations.

Over the year, the average number of Group employees was 70 (64). At the end of 2016, EPV Energy had 45 (41) employees, EPV Alueverkko 3 (3) and Tornion Voima Oy 22 (20) employees. Of the Group’s total personnel, 53 are officials and 17 employees.


The company has no current legal processes. 


On 31 January 2017, the company acquired the entire share capital of PVO-Alueverkot Oy, sold by Powest Oy. At the same time, it also acquired some power stations and power lines from the PVO companies. The network assets, which were the object of the purchase, will be incorporated into EPV’s other network operations.

The company is unaware of any other significant events following the financial year, which it has failed to mention in the annual report.


According to the information received from Teollisuuden Voima Oyj, the arbitration procedure relating to the OL3 project began in December 2008 at the instigation of the plant supplier. The financial claim updated by the plant supplier in February 2016 totals approximately 3.52 billion euros. The sum is based on the analyses of the events, updated by the plant supplier, dating up to September 2014 and, for some claims, up to the end of December 2014. The sum includes interest on delayed payments (calculated until the end of June 2016) and instalments delayed according to the Plant Supply Contract, totalling approximately 1.45 billion euros, as well as approximately MEUR 135 of profit, which the plant supplier claims not to have received.

The arbitration court made a final and binding transitional arbitration award in November 2016. The transitional arbitration award dealt with issues from the early stages of the litigation, such as schedule, licensing, licensing ability and system planning. The award dealt with many of the facts on which TVO bases its main claims against the plant supplier, as well as certain key issues on which the plant supplier’s claims against TVO are based. The transitional arbitration award finally resolved in TVO’s favour the majority of the issues heard and dismissed the majority of the plant supplier’s claims on these matters. The transitional arbitration award did not take a stand on the financial claims lodged by the parties. The arbitration proceedings continue and more transitional arbitration awards will be given before the final award, in which the court of arbitration will determine the parties’ liability to payment of compensation.

TVO considers its claims sound and has noted that the plant supplier’s claims are unfounded. The contents of the transitional arbitration award confirm this view. TVO has not recorded the receivables or reservations based on the claims presented in the arbitration procedure.

The generation of EPV is divided into different forms of production, the purpose of which is to minimise the risks connected to individual production forms. The company is unaware of any other exceptional risks concerning its operations.


The company’s most crucial task is to ensure that the electricity supplied to its shareholders remains competitive. This requires a continuous follow-up of the operating environment and influencing the development of existing generation resources. In addition, the company must maintain its capacity to make new investments, should the operating environment change.

The crucial factors influencing the development of electricity prices in the Nordic countries are the balance between demand and supply, the price levels for fuels and CO2 emission rights, and the water resource situation. At the beginning of February 2017, the hydrological water reserves of the Nordic countries were approximately 4 TWh below the long-term average and 8 TWh below the level for this period in 2016. The market price of emission rights for 2017 was about EUR 5 per ton of carbon dioxide. At the same time, the average electricity price on the derivatives market for the rest of 2017 was approximately EUR 26 per megawatt-hour and for 2018 approximately EUR 22 per megawatt-hour. The regional price in Finland was respectively EUR 34 and 30 per megawatt-hour. The forward price of coal for the rest of 2017 was approximately USD 67 per ton.

Due to the prevailing Nordic market situation and the uncertainty at the beginning of 2017, the generation of the resources owned by EPV has been slightly lower than the average generation year. It is difficult to predict the generation volumes for the rest of the year, particularly as regards CHP.

The investments in EPV’s wind power programme, which have proceeded to the construction phase in Torkkola in Vaasa, and Santavuori in Ilmajoki, have been completed and put into production. The Metsälä wind power farm in Kristinestad is in the construction phase and has been accepted into the current feed-in tariff system’s quota. The current market prices of electricity do not enable new investments in wind power farms without the support of the subsidy system. The Finnish government is currently preparing a new national energy and climate strategy, in connection with which the development of renewable energy sources and the future control systems for these are going to be surveyed.

The demand for electric power during consumption peaks will remain high over the next few years. Due to these consumption peaks and the running down of condensing capacity, the probability of the restricted use of electricity has grown. The worst case scenario is that the remaining condensing capacity is taken off the market due to the current system, endangering the existence of the entire peak load capacity system. It is fairly clear that, over the next few years, it will not be possible to improve the situation by constructing new power plants or transmission connections. A prerequisite for a functional electricity market is that there is a functional peak load capacity system in Finland, which can ensure that there is sufficient electric power available during consumption peaks. Over the last winter, it has become evident that the problems with power and reserve capacity are starting to show on the market.

The current electricity market is based on a time when the crucial objective of large, centralised power plants, running mainly on fossil fuels, was to generate electricity in a limited area, typically within an EU member state, for both households and businesses. The market is now moving fast towards decentralised generation. This may increase the number of producers in the sector and shift the current market balance. The electricity market needs to adapt to this new system, which will integrate all parties on the market, also where elasticity of demand, energy service businesses and renewable energy sources are concerned. In light of these developments, it is plain to see that the legal and fiscal environment of the energy sector in the Nordic countries has increased the risks for electricity companies


The distributable equity of the parent company amounts to EUR 213,718,937.86, of which the profit or loss for the financial year is MEUR 3,607,591.17. The Board of Directors proposes to the General Shareholders’ Meeting that no dividends are to be paid.