Helen’s financial statements release 2024: District heating became cleaner and more affordable thanks to accelerated clean transition investments

October–December 2024

• Consolidated net sales decreased year-on-year and amounted to EUR 421 million (EUR 528 million).
• Operating profit increased and amounted to EUR 67 million (EUR -6 million).
• Electricity sales increased by 32 per cent to 1,762 GWh (1,335 GWh).
• Electricity distribution in Helsinki increased by 1 per cent to 1,252 GWh (1,235 GWh).
• Heat sales decreased by 20 per cent to 1,775 GWh (2,230 GWh).
• Cooling sales increased by 3 per cent to 39 GWh (38 GWh).

January–December 2024

• Consolidated net sales decreased year-on-year and amounted to EUR 1,523 million (EUR 1,826 million).
• Operating profit increased and amounted to EUR 159 million (EUR 93 million).
• Electricity sales increased by 12 per cent to 5,283 GWh (4,729 GWh).
• Electricity distribution in Helsinki increased by 4 per cent to 4,571 GWh (4,387 GWh).
• Heat sales decreased by 3 per cent to 5,981 GWh (6,153 GWh).
• Cooling sales increased by 19 per cent to 244 GWh (205 GWh).

Consolidated key figures

Financial performance

Consolidated net sales decreased by 17 per cent year-on-year, mainly due to a decline in the market price of electricity, and amounted to EUR 1,523 million (EUR 1,826 million). The average spot price of electricity in 2024 was EUR 46 (EUR 57) per MWh, which is significantly lower than the average price of the previous year. Net sales derived from electricity production were lower than the previous year due to the low market prices and low production volume. Net sales from electricity retail were also below the previous year’s level due to the decrease in the selling price of electricity. District heating net sales remained good thanks to the good heating season in the early part of the year, and district cooling net sales remained unchanged. Electricity transmission net sales were higher than in the previous year.

A key development with regard to the profitability of Helen’s business units was district heating becoming profitable after years of operating at a loss. The costs of combined heat and power generation remained high, but the impairments recognised on coal-related inventories in previous years decreased coal costs significantly. The accelerated depreciations related to the discontinuation of coal-fired production that were carried out early in the year had a negative impact on the profitability of district heating only for part of the year. The profitability of electricity production decreased significantly year-on-year due to the decreased market price of electricity. In 2023, when the market price situation was challenging, Helen introduced Helen Smart Electricity Guarantee contracts, which were affordable to the customers but loss-making for the company. When the impact of that contract type was eliminated, the electricity retail sales business returned to profitability.

Depreciation excluding items affecting comparability amounted to EUR 128 million (EUR 143 million). The depreciation includes accelerated depreciation of EUR 18 million (EUR 72 million) associated with the discontinuation of coal-based production at the Salmisaari power plant.

Operating profit came to EUR 159 million (EUR 93 million). Operating profit was negatively affected by the accelerated EUR 18 million depreciation recognised in connection with the discontinuation of coal-based production in Salmisaari, and a write-down of EUR 7 million recognised on fixed assets in relation to the closure of the Kellosaari reserve power plant. Comparable adjusted operating profit amounted to EUR 185 million (EUR 219 million). Comparable relative profitability was on a par with the previous year at 12 per cent (12 per cent). The reported return on capital employed improved to 5 per cent (4 per cent).

Comments by CEO Olli Sirkka

The year 2024 was characterised by profound changes in district heating. Previously, this heating method suffered from coal-darkened reputation, but now it is increasingly based on carbon neutral energy, which for Helen means electric heat pumps and electric boilers, among other things. We became one of Finland's most significant industrial investors by making record-breaking investments of EUR 565 million in carbon-neutral energy during the financal year. The total investments amounted to EUR 600 million.

One of the most pivotal changes was the return of the heating business to profitability after years of operating at a loss. The change was driven by the determined long-term work to improve the competitiveness of district heating. The earlier decision to decommission the Hanasaari and Salmisaari coal-fired power plants in advance of the original plans will yield positive financial development as the costs of fuels and emission allowances will no longer burden district heating as before. This benefits both Helen’s owner and our customers, for whom lower district heating costs will result in lower prices.

We continued to reduce emissions as planned. In 2024, the emission reduction was 24 per cent, and the share of carbon neutral energy in our production rose to 63 per cent. The decrease in emissions is also driven by the phasing out of fossil fuels and their replacement with heat pumps and electric boilers, for example. The story of coal will end for Helen in spring 2025, when we will completely discontinue its use.

Helen does not support market price support mechanisms for clean transition investments. Instead, we believe that companies should find commercially viable solutions through markets that arise on a market basis or, if necessary, are created through regulation. By doing so, we can ensure that the clean transition is cost-efficient also for customers.

Electricity price fluctuations, which can be quite significant at times, and the sufficiency of electricity stirred debate in society during the year. The transition from a stable-price fossil economy to a system based on renewable energy has taken place faster than expected, which has highlighted the need to mitigate fluctuations in electricity prices. Price fluctuations create an incentive to develop the flexibility that is necessary for the market’s ability to function. If achieved, this flexibility evens out price fluctuations.

To support the flexibility of the energy system, we made an investment decision on Helen’s first green hydrogen production plant during the financial year. The pilot plant to be built in Helsinki’s Vuosaari district will allow us to increase our expertise to meet the needs of large-scale hydrogen production. The waste heat generated as a by-product of the production process will be put to use in Helen’s district heating network.

In order to achieve Helen’s strategic non-combustion target and to phase out biomass combustion by 2040, we need alternative heat production solutions. To accelerate this development, we launched a nuclear energy programme during the financial year the goal of which is to build a combined heat and power plant or a district heating plant. The first phase of the programme is due to be completed in 2026.

Significant events during the financial year

• As part of the new strategy, the parent company adopted an organisational structure based on business units that are accountable for their results and functions that support the business units. The new Management Group started its work on 1 January 2024.
• The parent company sold its 58 per cent shareholding in Geonova Oy, a provider of geothermal and heat pump solutions, to CBRE Investment Management. The transaction is part of the execution of the company’s strategy, according to which its Heating and cooling business will focus on district heating and cooling services.
• Following the product renewal that took effect at the turn of the year, monthly pricing was introduced for district heating. In addition, the total price of district heating decreased twice during the year.
• The 140-MW electric boiler plant built in connection with Hanasaari’s existing heating plant and the Salmisaari boiler that was converted from coal-fired to pellet-fired started production. The Kruunuvuorenranta seasonal energy storage facility and the waste heat recovery plant at Equinix Oy’s Viikinmäki data centre also went into production.
• The Pjelax, Karahka and Kalistanneva wind farms became operational. The majority owner of the Pjelax wind farm is Fortum Corporation with a shareholding of 60 per cent. The majority owner of the Karahka and Kalistanneva wind farms is Helen.
• The Lohja solar farm was commissioned. The solar farm consists of 12,400 solar panels and generates renewable electricity with an output of approximately 7 MW. In 2025, a 5-MW electricity storage facility will be completed at the solar farm.
• The parent company made an investment decision on an air-to-water heat pump plant and two electric boilers with a combined heat production capacity of 100 MW to be located at the company’s existing production site in Patola. The air-to-water heat pump plant, based on new technology, will be the first of its size in the world. The plant complex is scheduled to be completed during the 2026–2027 heating season.
• The parent company made an investment decision on an electric boiler plant and a heat storage to be built in the Hanasaari energy block. Comprising four electric boiler units, the plant will have a capacity of 200 MW, making it the largest in Europe. The heat storage facility will have a capacity of 1,000 MWh. The plant complex is scheduled to be completed during the 2026–2027 heating season.
• The parent company made an investment decision on a 40-MW electricity storage facility to be built in Nurmijärvi. The facility is one of the first large-scale electricity storage systems in Finland.
• The parent company made an investment decision on a green hydrogen production plant to be built in Vuosaari. This is Helen’s first hydrogen project. The project will allow the company to increase its expertise to meet the needs of large-scale hydrogen production and enhance the flexibility of the entire energy system. The produced hydrogen will primarily be used through a hydrogen refuelling station to be built in connection with the plant.
• The parent company started a nuclear energy programme that is aimed at the utilisation of nuclear energy in heat production in Helsinki. In the first phase of the programme, the company will negotiate with potential partner shareholders, evaluate plant suppliers and determine potential locations.

Significant events after the financial year

• The parent company acquired the electricity sales business of Raseborgs Energi Ab, as a result of which the electricity customers of Raseborgs Energi Ab transferred to Helen in January 2025. The transaction strengthens Helen’s position in the Finnish energy market and supports the company’s goal of becoming the most significant player in the retail market for electricity.

Outlook

High electricity prices and strong price fluctuations have made energy one of the key political topics both in Finland and at the EU level. In Sweden, it was decided to suspend the planning of new cross-border transmission connection projects to Central Europe for the time being, and in Norway, there have been discussions about the possibility of stopping electricity exports via the oldest transmission connections. Key objectives of the European electricity market integration and the clean transition have long been the single market area that is as extensive as possible and the easy transmissibility of energy made possible by such a market area. Finland’s energy system relies on the continuation of effective Nordic electricity market cooperation.

Helen operates in electricity markets in diverse roles as a producer, vendor and consumer, which reduces its exposure to the risks caused by market fluctuations. In its business operations, Helen also aims to take advantage of the opportunities presented by price fluctuations. By operating in accordance with its strategy, the company will also be increasingly able to balance fluctuations in prices in the future by increasing electricity consumption when supply is high, and reducing consumption when supply is low.

In 2025, a significant amount of new wind power capacity will be completed in Finland, which is expected to increase the volatility of the electricity market. However, the general weak economic situation and falling electricity prices have reduced the number of new wind power projects as investors’ interest in wind power has declined. Ministerial initiatives on nuclear power production subsidies further weaken investors’ interest in wind power and other forms of energy production and storage.

The cleaner and more affordable district heating has changed its perception in the eyes of the general public, and it is increasingly seen as a form of heating with equal climate impacts compared to geothermal heating. This trend predicts that the customer churn, which has affected district heating, will slow down and eventually turn into increased demand. The positive development is supported by the convenience offered by district heating and the benefits it brings to the customers as well as to the entire energy system. The outlook for district heating is positive for 2025.

The clean transition will place new demands on the electricity network. When combined heat and power generation is discontinued, there will be hardly any electricity produced in Helsinki, but the capital’s electricity consumption will increase year by year. Securing the transmission capacity of the main grid in the Helsinki metropolitan area is an absolute prerequisite for an increasingly electrified society. This will require rapid progress in regulatory and licensing matters. The price increases in main grid fees and changes in the regulatory model challenge the profitability of electricity transmission, while the electricity network investment needs in Helsinki are increasing.

Helen’s investments in carbon neutral electricity, heat and cooling production are becoming concrete as new wind and solar farms and electricity storage facilities are built around Finland and existing production sites in Helsinki are transformed. The company’s production structure is shifting from combined heat and power generation to separate production, in which the main electricity production forms are hydro, nuclear, wind and solar power. Heat production is rapidly becoming increasingly electric. In the future, it will consist of heat pumps, electric boilers and sustainable bioenergy.

Green hydrogen will emerge as a new addition to Helen’s production palette. The preconditions for large-scale production will be investigated by means of a pilot plant. Assessments of the role of small-scale nuclear power as part of a sustainable energy system are also moving forward.

Helen's Annual Review 2024 will be published on 19 March 2025.