CEO’s statement

EPV turned an impressive 70 years old in 2022. Despite the energy crisis, it was a successful year for our Group, and we delivered a record return on investment to our shareholders. We achieved major milestones in several business areas – our projects progressed well and we made significant new investment decisions.

Despite the challenging conditions, EPV continued its journey towards zero emissions in 2022.

Record year despite the energy crisis

Despite the huge upheaval in energy markets as a result of the outbreak of war in Europe, EPV performed well in 2022, delivering more value to our shareholders than ever before in our 70-year history.

Russia’s invasion of Ukraine led to a sharp rise in the price of fossil fuels and the end of energy imports from Russia to Finland. This situation has highlighted the importance not only of energy independence, but also of emission-free energy solutions. That is why at EPV we continued our journey towards zero emissions with as much determination as ever, despite the challenging conditions. Our goal is to be carbon neutral by 2030, in line with our strategy, which we call the New Electricity Revolution. 

Notable milestones

During the year, major events took place on the project front for EPV. Olkiluoto 3 began its electricity production, we completed the building of our sixth wind farm in Närpes and we successfully concluded our project involving the building of an electric boiler and district heating battery in Seinäjoki. We also made the decision to invest in new electric boilers in Vaasa and Tornio, an electric battery storage in Teuva and an extension of the thermal energy storage (TES) facility in Vaasa.

Several other large-scale projects are still in the planning and implementation phase. These include EPV’s first industrial-scale solar farm in Lapua, a unique pumped-storage hydropower (PSH) plant in Pyhäsalmi and a wind farm in Laihia. When implemented, these projects alone will represent an investment of well over EUR 300 million.

Our Group also underwent a number of structural changes. The establishment of EPV Solar Power Ltd was a milestone for us as we move towards launching solar power generation. In addition, business acquisitions that have been in the pipeline for many years were completed in Vaasa and Seinäjoki, when EPV acquired the entire business of Vaskiluodon Voima and the heat production in the Seinäjoki region from Seinäjoen Energia.

More emphasis on flexibility

In response to the geopolitical situation and the challenges it poses, we made refinements to our EPV strategy over the year. We still have a strong focus on zero-emission energy, but our emphasis has shifted from increasing production more towards balancing the energy system and creating flexibility through investments. Our aim is to secure the energy supply for our shareholders and society in all situations, regardless of weather conditions.

The main challenges we face are the adequacy of electricity and seasonal energy storage. In the future, EPV will invest more and more in sector coupling and energy storage. A good example of this are the investment decisions taken in Vaasa on the expansion of the thermal energy storage facility and new electric boilers. When the investments are completed, Vaasa will be home to one of the largest sector coupling integrations in Finland.

The electricity market model needs to change

The energy-only electricity market model in use in Finland and other Nordic countries is set to change as electricity prices rise. The current market model leads to fluctuations in electricity prices that are too high for society to absorb. EPV advocates a reform of the market model to reduce the volatility of various types of extreme situations. In practice, this means including some kind of capacity component in the market model.  

Another weakness of the current market model are the collateral requirements for energy operators. Even though EPV, like other energy operators, supplies its owners with electricity it has produced itself, we have to be prepared for collateral requirements of well over EUR 100 million to guarantee our operations. Such a model is unsustainable and a new solution needs to be developed quickly. 

Developing our financial structure

Our financing requirements will increase as we continue to invest in line with our strategy. In 2022, EPV’s balance sheet broke the one billion euro barrier. As our loan amounts increased and interest rates and the price of money rose, we decided to carry out a strategic review in 2022 to develop our financial structure.

Based on the review, we set a target to acquire new funding channels for EPV and to enter the bond market by 2025. To achieve this, we are making preparations to start reporting according to the International Financial Reporting Standards (IFRS) in early 2024. In the same year, we will also switch to sustainability reporting as required by the EU Corporate Sustainability Reporting Directive (CSRD) and the EU taxonomy.

Thank you to everyone at EPV and to our partners

Despite the challenging energy environment, EPV’s 70th year was a great success overall. We have our experts, our cross-organisational technology teams and our partners to thank for this. Thanks to their hard work, we completed several projects, made many new investment decisions and created a record amount of added value for our shareholders.

Rami Vuola 
EPV Energy Ltd 

Despite the challenging conditions, EPV continued its journey towards zero emissions in 2022.