Fortum to discontinue electricity production at Inkoo coal-fired power plant in Finland
FORTUM CORPORATION STOCK EXCHANGE RELEASE, 13 August 2013
Fortum has decided to discontinue electricity production at its Inkoo coal-fired power plant in Finland. Production operations will end in February 2014, after which the company will mothball three units. As a consequence of the decision to cease production, Fortum will book an impairment loss of approximately EUR 25 million in the Power division’s third quarter results.
About 80 jobs will be cut from the Inkoo power plant by February 2014 at the latest. On 12 June 2013, Fortum started employee negotiations that affected all power plant personnel. The employee negotiations ended on 24 July. Approximately 90 employees work at the power plant.
The decision is based on the weak profitability of the Inkoo power plant. The demand for coal condensing power in the Nordic power market has decreased as a result of the economic recession and the drop in the wholesale price for electricity. Consequently, the power plant’s utilisation rate has been low in recent years. The requirements of the EU’s Industrial Emissions Directive (IED) will further burden the profitability of old coal-fired power plants.
The decision to cease production operations was preceded by a study that assessed the future alternatives for the Inkoo coal-fired power plant. The other two alternatives were to continue the current operations or to partially close the power plant.
”Personnel reductions are very unfortunate, but unavoidable in this situation. We will use a variety of means to support the job search and redeployment of the employees who will lose their job. During the upcoming months, we will study the use of the Inkoo power plant area also for other purposes because the location of the power plant in the vicinity of the harbour may provide feasible opportunities,” says Fortum’s Matti Ruotsala , Executive Vice President, Power Division.
Senior Vice President, Corporate Communications
Matti Ruotsala, Executive Vice President, Power Division, tel. +358 40 048 7052
Pauliina Vuosio, Vice President, Financial Communications, tel. +358 50 453 2383
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Inkoo power plant’s background
Commissioned in 1974-1978, the Inkoo power plant has operated in recent decades as a reserve power plant and has generated electricity for the Nordic market mainly during periods of peak consumption. The power plant consists of four 250-megawatt units, some of which have been off-line for long periods of time in extended start-up readiness.
The Inkoo power plant’s third unit has been in the Energy Market Authority’s capacity reserve from October 2011 to the end of June 2013. Inkoo power plant was not selected this spring for a continuation period. On 27 March 2013, Fortum notified the Nordic power exchange, Nord Pool Spot, that it will close the power plant’s unit four, which had not been in operation at all since 2008. After the notification, the power plant’s total capacity decreased to 750 megawatts.