Competition Authority drops investigation into Fortum's district heat pricing in Sweden
Fortum Corporation Press release 15 November 2010
Competition Authority drops investigation into Fortum's district heat pricing in Sweden The Swedish Competition Authority (SCA) today announced that it has dropped its investigation concerning the use of market position and price setting of Fortum's district heating in the Stockholm area. The SCA launched the investigation in 2007 on grounds that Fortum Värme, in which the City of Stockholm has a 50% economic interest, is the largest district heat operator in Sweden and Stockholm is the largest district heat market in the country. The authority concludes, for example, that the real price of district heat has in fact decreased in Stockholm by 1.5% during 2005-2010. During the investigation it has become even clearer how important customer confidence is for district heat providers. Fortum wants to assure its customers on the fair pricing of district heat by disclosing even more openly its revenues and the revenue frame required in 2011 for the sustainable development of its production capacity and networks "We welcome the SCA's decision to drop the investigation. When criticising the price of district heating, it is easy to lose sight of the fact that customer prices are affected by the so-called green tax reform that has raised taxes and cost of power and heat production in Sweden. The aim of the reform was to accelerate the transition to a sustainable energy supply. In fact, the costs of all other heating forms have increased more than our district heating prices," says Anders Egelrud, Managing Director of Fortum's heat business in Sweden. District heating is a convenient and environmentally-benign alternative particularly when the heat is produced in resource and energy efficient combined heat and power (CHP) plants that commonly have an over 90% fuel efficiency ratio. In Stockholm, carbon dioxide emissions have decreased by 60%, nitrogen oxide emissions by 80% and sulphur oxide emissions by 90% since 1980 largely thanks to the wide penetration of district heating in the city. Fortum plans to further reduce the environmental impact of its power and heat production in Stockholm by increasing the share of biomass and waste fuels. "To date, district heating has enabled Stockholm to become one of the world's most sustainable capital cities, but district heating shouldn't be taken for granted. The coming decades call for significant investments in new, efficient production capacity to ensure that district heating, also in the future, is an attractive option for our customers both in terms of price and reliability. For us, it's a given that the new investments will be climate-friendly," Anders Egelrud concludes. Fortum Corporation Corporate Communications Further information: Per Langer, Executive Vice President, Fortum Heat Division, tel. +46 70 344 5658 Jens Bjöörn, Head of Communications, Fortum Värme, tel. +46 702 98 41 25