Economy
Subsidiaries and associated companies
HelenTrading
HelenTrading reached its result targets, the focus was on developing the operating model
The result of HelenTrading's operations was at the previous year's level and the result targets were mainly reached. The turnover was EUR 326 million. The turnover fell by EUR 7 million, i.e. by 2%, from the previous year. The total amount of electric energy sold decreased by 7%. The drop in the sales volume was due to the fact that the year 2007 was one degree warmer than average, as well as the low market price during the summer season.
The area price for Finland quoted by Nord Pool was EUR 30/MWh (EUR 48.6/MWh in 2006), i.e. 38% lower than in the year before. Even though the area price for Finland fell significantly, the average price of the electricity sold by HelenTrading rose by 5%. The implementation of systematic price hedging based on the operating principles and risk management policy of Helsingin Energia's electricity trading made the positive development possible. Income from emission allowance trading amounted to EUR 10.4 million, and this figure is visible in other operating income.
The first emissions trading period ended in rising fuel prices
When the first EU emissions trading period ended on 31 December 2007, the emission allowance price was zero. When the 5-year Kyoto period started at the beginning of 2008, the price quoted for emission allowances exceeded EUR 20 /tonne. The turn of the year was a special boundary mark due to the differences in the pricing of emission allowances, and it was also clearly reflected in the Nordic electricity market, where hydropower producers were optimising the value of water.
Fuel prices rose to a new record level during the year 2007. Within a short period of time towards the end of the year, the price of coal increased by approx. 50% due to, i.a., the growing needs of Asian countries and increases in freight costs.
The integration development of the Nordic electricity market in the direction of Continental Europe continued in co-operation between exchanges and transmission system operators. A submarine cable between Norway and the Netherlands was completed, and it will be ready to begin commercial operation in the first quarter of 2008.
Towards the end of the year, the focus was on developing the operating model
The success of the electricity value chain formed by HelenPower, HelenTrading and HelenElectricity, all of which are involved in Helsingin Energia's electricity trading, can in one respect be evaluated by the price assurance measures applied to electricity trading. In 2007, the realised electricity price was considerably lower than anticipated in the autumn before. The price assurance measures taken contributed significantly to the positive result of electricity trading.
Helsingin Energia will participate in a competitive tendering process concerning a waste-fired power plant project, to be arranged by the Helsinki Metropolitan Area Council YTV. The procurement of the waste-fired power plant will be implemented by means of competitive dialogues, after which YTV will choose the candidates from whom the final offers will be requested. The objective of the procurement is to arrange the energy utilisation of waste by incinerating.
In October, the Technical Committee of the City of Helsinki made a decision on implementation of an organisational reform related to the development of the operating model at the beginning of 2008. As part of the development of the operating model, HelenTrading and the Generation Coordination Unit of HelenPower were merged into HelenPortfolioManagement. HelenPortfolioManagement is in charge of the commercial operations and availability of Helsingin Energia's power plants and power assets. Behind the development of the operating model are the changes taking place in the operating environment, the most central of which are the emphasis laid on climate issues and the resulting increase in the complexity of production mechanisms and electricity trading.
The focus staff development was on strengthening electricity market-related competence and enhancing well-being at work. These focus areas of continuous development will be central also in 2008.
HelenTrading is responsible for electricity trading on the Nord Pool Power Exchange, electricity wholesale and emission allowance trading. HelenTrading had 11 employees at the end of the year 2007.
Price trend of electricity
(local price in Finland)
Nordic water resources
(Finland, Sweden, Norway)
