Fingrid’s Financial Statements Bulletin January–December 2023:
Clean and high-quality electricity system and largest ever grid
investments created conditions for electricity consumption growth
Stock Exchange Release 27 February 2024 at 13:15 EET
Fingrid’s consolidated financial statements have been drawn up
in accordance with the International Financial Reporting Standards
(IFRS). Unless otherwise indicated, the figures in parentheses
refer to the same period of the previous year. The information
published in this report is based on Fingrid’s audited financial
statements for 2023, published in connection with this
bulletin.
- The Fingrid Group turnover fell due to the lower electricity
price. The profit for the period fell due to a negative change in
the fair value of electricity derivatives and currency derivatives
linked to capital expenditure and other operating costs. Profit
before taxes excluding changes in the fair value of derivatives was
higher than in the previous year due to the increase in the allowed
profit.
- The company’s EUR 4 million investment programme proceeded
according to plan, marking the biggest annual investments in the
main grid in the company’s history, which enables an increase in
the production of growing renewable energy and the growth of the
power system.
- Grid service fees were waived for six months. The pricing of
the balance service was changed three times during 2023 to
correspond with operating costs. Significantly less congestion
income accumulated compared to 2022.
- Finland’s electricity consumption in 2023 amounted to 79.8
(81.6) terawatt hours, of which 83.1 (78.4) per cent was
transmitted in Fingrid’s grid.
- The grid transmission reliability rate was 99.99995 (99.99993)
per cent, the best on record.
- 1,920 (2,251) megawatts of renewable energy production was
connected to Fingrid’s main grid.
KEY FIGURES |
|
1-12/23 |
1-12/22 |
change % |
7-12/23 |
7-12/22 |
change % |
Turnover |
€M |
1,193.2 |
1,815.2 |
-34.3 |
638.4 |
1,123.1 |
-43.2 |
Capital expenditure, gross |
€M |
322.0 |
276.1 |
16.6 |
191.3 |
154.1 |
24.2 |
- of turnover |
% |
27.0 |
15.2 |
|
30.0 |
13.7 |
|
Research and development expenses |
€M |
2.4 |
1.8 |
35.3 |
1.2 |
0.8 |
62.9 |
- of turnover |
% |
0.2 |
0.1 |
|
0.2 |
0.1 |
|
Average number of employees |
|
517 |
480 |
7.7 |
528 |
486 |
8.6 |
Number of employees at end of period |
|
544 |
489 |
11.2 |
544 |
489 |
11.2 |
Salaries and bonuses, total |
€M |
35.8 |
31.9 |
12.5 |
17.9 |
15.6 |
14.9 |
Operating profit |
€M |
1.0 |
290.4 |
-99.7 |
80.5 |
-33.1 |
342.8 |
- of turnover |
% |
0.1 |
16.0 |
|
12.6 |
-3.0 |
|
Profit before taxes |
€M |
1.3 |
257.4 |
-99.5 |
86.4 |
-42.0 |
305.5 |
- of turnover |
% |
0.1 |
14.2 |
|
13.5 |
-3.7 |
|
Profit for the period |
€M |
1.2 |
205.8 |
-99.4 |
69.1 |
-33.6 |
305.8 |
Comprehensive income for the period |
€M |
1.1 |
205.8 |
-99.4 |
69.1 |
-33.6 |
305.8 |
Cashflow after capital expenditure |
€M |
-180.3 |
747.5 |
-124.1 |
-137.8 |
398.3 |
-134.6 |
Return on investments (ROI) |
% |
1.6 |
16.3 |
|
|
|
|
Return on equity (ROE) |
% |
0.2 |
30.1 |
|
|
|
|
Equity ratio |
% |
20.1 |
22.4 |
|
20.1 |
22.4 |
|
Interest-bearing net borrowings |
€M |
535.2 |
322.7 |
65.8 |
535.2 |
322.7 |
|
Net gearing |
% |
91.0 |
44.8 |
|
91.0 |
44.8 |
|
Dividend, Series A shares |
€ |
54 100,00 * |
52,500.00 |
|
|
|
|
Dividend, Series B shares |
€ |
19 800,00 * |
19,200.00 |
|
|
|
|
Equity per share |
€ |
176,802 |
216,469 |
-18.3 |
|
|
|
Number of shares |
|
|
|
|
|
|
|
– Series A shares |
qty |
2,078 |
2,078 |
|
2,078 |
2,078 |
|
– Series B shares |
qty |
1,247 |
1,247 |
|
1,247 |
1,247 |
|
Total |
qty |
3,325 |
3,325 |
|
3,325 |
3,325 |
|
* The Board of Directors’ proposal to the Annual General Meeting on
the maximum dividend to be distributed |
Review by the President & CEO: Finland beginning new
electrification leap
“The key themes for 2023 were transmission reliability and the
functioning of the electricity market. Price fluctuations were
discussed in the media throughout the year, making the
functionality of the electricity market a hot topic. Following the
crisis winter, the situation was normal, however, and the market
mechanism was operating as intended: the electricity price is the
result of a balance in production and consumption. Electricity
price fluctuations have come to stay as renewable production
increases.
The electrification of society and the new kind of
industrialisation require substantial amounts of electricity.
According to Fingrid’s assessment, as a result of industrial
investments, Finland’s electricity consumption could grow as much
as 50 per cent this decade. However, any type of electricity does
not win the race. It needs to be emission-free, afforable and
secure – the kind of electricity we have in Finland. Renewable
energy will make Finland a very attractive country for industrial
investors. Combining competitive electricity production with strong
electricity networks, which transmit electricity reliably from
production to consumption, results in a winning solution. In
today’s world, reliable electricity networks and the main grid’s
ability to connect new projects with the electricity market are
some of the most important national competitive factors in
industrial projects involving the green transition.
The overall role of the networks has become extremely critical
because electricity production and consumption facilities must be
physically connected to one another. At the end of last year, the
European Commission published its high-level political action plan
to speed up the construction of networks. Finland has long
understood the significance of grid infrastructure and developed
electricity networks in the long term. Fingrid is implementing its
biggest ever, EUR 4 billion, investment programme for the next ten
years, which will enable it to significantly increase the
connection of emission-free electricity production and use of clean
electricity. Building the required transmission connections is a
multi-year undertaking. Implementation and financing of the
programme requires a stable regulatory environment that supports
investments to be used for multiple decades.
Our strength is an wide and predictable electricity market. We
are an integral part of the joint European internal market for
electricity, and a single price area that covers the whole of
Finland offers stability in our operating environment. Ahead of us
lie significant market changes that have been under preparation for
a long time, i.e. the modernisation of the transmission capacity
calculation method and balancing power markets. Due to the
transformation of the power system, these changes are necessary and
also enable the market to shift to a 15-minute imbalance settlement
period instead of an hour.
Alongside the market changes, a continuous challenge is the
growing need for reserves required to balance the power system.
This is an area where Fingrid’s and the market operators’ interests
meet. Participating in the reserve markets by offering production,
demand and energy storage facilities’ balancing energy and capacity
provide market operators additional earning opportunities.
Correspondingly, Fingrid and the whole of Finland’s electricity
system benefit from the development of the power system reserve
markets’ supply.
Cleaning up the energy system comes down to cooperation – none
of us can do it alone. Electricity producers, consumers, network
operators, investors, infrastructure developers, service providers
as well as authorities are needed to work together towards a shared
goal, for Finland’s climate targets and success. In this
collaboration, Fingrid acts as the glue between the different
stakeholders forming the foundation for the entire energy
system.”
Financial result
Fingrid’s consolidated financial statements have been drawn up
in accordance with the International Financial Reporting Standards
(IFRS). Unless otherwise indicated, the figures in parentheses
refer to the same period of the previous year. Fingrid’s
consolidated financial statements have been drawn up in accordance
with the same accounting principles as in 2022.
Following the crisis winter of 2022, the price of electricity
has fallen from its peak thanks to a mild winter and the normal
operation of the electricity market. Although the average price of
electricity has fallen, the variation in the electricity price has
been large, resulting from the fluctuation in weather-dependent
production and the availability of production plants and
transmission connections. As renewable energy production increases,
electricity price variations are here to stay.
The Group turnover fell due to the lower electricity price.
Imbalance power sales and procurement costs decreased
significantly. Balancing the power system results in fluctuations
in turnover, which stems from the increasing weather-dependency of
electricity production, and the electricity production and
consumption forecast uncertainty. Income from grid service fees
decreased to EUR 164.5 (333.7) million, due largely to Fingrid
waiving the grid service fees for six months. In addition, the
electricity consumption on which grid service revenue is based fell
in Finland to 79.8 (81.6) terawatt hours in 2023. Fingrid’s
congestion income generated through cross-border transmission
connections was significantly lower than last year’s due to the
lower area price differences between Finland and Estonia and
Finland and Sweden. Fingrid’s congestion income amounted to EUR
260.1 (942.9) million, of which Fingrid’s share was EUR 220.9
(942.9) million. Fingrid’s income on the financial transmission
rights (FTR) issued on the Finland–Estonian border amounted to EUR
57.0 (0.0) million, and the congestion income credited to the
holders of corresponding transmission rights was EUR 96.2 (0.0)
million. A total of EUR 284.7 (229.5) million in congestion income
was recognised in turnover to cover the waiving of grid service
fees and operating expenses, and EUR 118.0 (18.8) million in other
operating income to cover FTRs and cross-border capacity costs.
The Group’s costs, excluding the change in the value of
commodity derivatives, amounted to EUR 1,126.8 (1,695.8) million.
Due to the lower price of balancing power, the costs of purchased
imbalance power fell to EUR 491.1 (1,141.2) million. Due to a lower
electricity price and lower area price differences for electricity,
the congestion costs resulting from the surplus in the national
electricity balance amounted to EUR 15.5 (69.4) million. Loss power
costs came to EUR 75.2 (103.9) million, which resulted from the
lower average loss power procurement price of EUR 45.09 (60.32) per
megawatt hour. The amount of loss power procured was 1.7 (1.7)
terawatt hours. The cost of reserves to safeguard the grid’s system
security and power balance were on par with the previous year and
amounted to EUR 185.6 (186.9) million, despite the higher
procurement volume. Due to the progress made in the company’s
extensive investment programme, depreciation grew to EUR 123.3
(107.9) million. Grid maintenance costs grew to EUR 22.5 (19.6)
million. Personnel costs grew to EUR 42.8 (38.1) million, which
mainly correlates with the increase in the number of personnel
required for the expansion of the operations and the increasing
complexity of the power system.
The Group’s operating profit excluding the change in the fair
value of derivatives was EUR 186.1 (149.8) million. The Group’s
profit before taxes was EUR 1.3 (257.4) million. The result was
improved by the growth in the company’s allowed profit and the
decrease in the Group’s net financial costs. The result was
weakened by a negative change of EUR -185.1 (140.6) million in the
fair value of electricity derivatives and currency derivatives
linked to capital expenditure and other operating costs. The market
value of electricity derivatives fell as a result of the decline in
the electricity price and maturity of derivatives. Electricity
derivatives amounted to 4.0 TWh (4.5 TWh) at the end of 2023.
Profit for the financial year was EUR 1.2 (205.8) million. The
equity ratio at the end of the financial year was 20.1 (22.4) per
cent.
The company currently has a EUR 4 billion investment programme
under way for the next ten years. In 2023, the company’s total
investments grew to EUR 322.0 (276.1) million due to increasing
capital expenditure to enable the green transition and growing
electricity consumption. This included a total of EUR 303.8 (246.0)
million invested in the transmission grid and EUR 2.8 (3.7) million
for reserve power. ICT investments amounted to EUR 8.8 (11.0)
million. A total of EUR 2.4 (1.8) million was used for R&D
projects during the year under review.
The parent company’s turnover was EUR 1,209.7 (1,808.7) million,
profit for the financial year EUR 141.4 (114.4) million and
distributable funds EUR 174.4 (166.0) million.
The allowed profit in line with the regulatory method regulating
reasonable profit in transmission grid operations rose in 2023 from
the previous year, which was the result of a higher interest rate
level, the company’s increased investments and utilisation of
accumulated deficits. Based on the company’s own calculations, the
allowed regulatory profit amounts to a surplus of around EUR 35
million for 2023. The cumulative surplus on the allowed profit for
the 2020–2023 regulatory period was EUR 25 million. Accounting for
the deficit in the allowed profit accumulating in earlier
regulatory periods, some EUR 28.5 million, the allowed profit for
the 2020–2023 regulatory period was in deficit.
The Energy Authority decides on the use of the congestion income
received by Fingrid for investments, to cover costs and for use as
turnover in line with EU regulation. A regulatory letter submitted
to Fingrid by the Energy Authority in 2023 specifies the use of
congestion income in 2024. The decision concerning the use of
congestion income is provided in conjunction with the regulatory
decisions given for each of the company’s regulatory periods, after
each regulatory period. Fingrid’s unused congestion income is
recorded on the balance sheet under short- and long-term
non-interest-bearing liabilities. Congestion income will be used
for future investments increasing cross-border transmission
capacity, to allocate cross-border transmission capacity to
maintenance-related costs and by recognising it as revenue for the
benefit of customers.
Financing
The Group’s net financial costs were EUR 0.2 (32.7) million,
including EUR 0.6 million in interest expenses on the lease
liabilities booked into the balance sheet. Net financial costs fell
after the increase in the interest rate level increased finance
income on cash and cash equivalents and due to the positive change
in the market value of actual interest rate swaps and derivatives
hedging loans. The change in the fair value of financial
derivatives was EUR 4.9 million negative (EUR 24.8 million
negative).
Interest-bearing borrowings totalled EUR 998.1 (1,056.2)
million, of which non-current borrowings accounted for EUR 654.7
(990.4) million and current borrowings for EUR 343.5 (65.8)
million. At the end of the year, the company’s interest-bearing
borrowings included a total of EUR 31.2 million in lease
liabilities, consisting of EUR 3.2 million in short-term
liabilities, to be paid within a year.
During the review period, the company’s cash assets fell due to
the use of congestion income generated in 2022 for waiving grid
service fees and due to covering the rising costs of the grid
operations instead of raising grid service tariffs. Cash and cash
equivalents and other financial assets totalled EUR 387.0 (733.4)
million on 31.12.2023. The company’s financial position remained
strong.
Customers
Fingrid’s operations are largely based on performing statutory
duties. This task is performed with maximum customer focus, on
impartial and equal terms. Fingrid’s customers include distribution
system operators (DSOs), electricity producers, industries
consuming electricity and other electricity market operators.
Thanks to the energy transformation, the customer base has become
more diverse in recent years and, for example on the reserve
markets, entirely new kinds of customers have entered the picture,
supporting the power system’s balance and quality.
Grid services guarantee customers smooth connections to the
electricity network and reliable transmission of electricity in the
main grid that meets consumers’ needs. The connection enquiries
received by Fingrid for clean electricity production and green
technology industrial projects continued to grow. The total
capacity of new connection enquiries at the end of 2023 was around
360,000 megawatts. Electrification is also making headway in
electricity consumption, with the increase in clean energy
production capacity and secure transmission of electricity enabling
the implementation of industrial consumption investments in the
green transition. Enquiries looking to connect new types of
electricity consumption sites, such as data centres, hydrogen
production and battery storage, and the metal industry directly to
the main grid have grown and connection enquiries amounted to some
26,000 megawatts at the end of 2023.
Electricity market services offer all industry players a unified
price area for electricity trade in Finland, and the opportunity to
buy and sell imbalance power as well as other market-based
solutions to ensure the high quality of the power system.
Electricity markets are supported by grid investments reinforcing
the transmission connections. Cross-border transmission connections
offer access to the European electricity markets and give the
markets the largest possible transmission capacity.
Fingrid’s key customer fees related to services are the grid
service fee and balance service fee. The objective of the company’s
pricing is to match the company’s costs and allowed regulatory
profit at any given time. Fluctuations especially in the
procurement costs of the power system reserves have steered Fingrid
to review balance service fees three times during the reporting
year. Fingrid announced that it will update the grid connection
fees to match the rise in substation connection construction costs
in accordance with the principles for the grid connection fees as
of 1 January 2024. Due to exceptionally large area price
differences in 2022, Fingrid accumulated a significant amount of
congestion income. During 2023, Fingrid waived grid service fees
for six months. This reduced grid customers’ fees by
altogether some EUR 220 million.
Fingrid gauges the satisfaction of its customers with its
services and operations with annual surveys. In the autumn 2023
survey, Fingrid’s net promoter score from customers was +45
(+50).
Main grid
Fingrid develops and operates the grid to meet customers’ and
society’s needs. The starting points are the anticipation of needs,
correctly timed grid construction, promoting the effectiveness of
the electricity market, cost-effectiveness, and managing the ageing
of the grid.
The long-term development of the grid ensures that the
electricity transmission grid and the entire electricity system
meet the requirements set for it in a rapidly changing operating
environment. Fingrid updated the main grid development plan for
2024–2033 during the year under review. The development plan is the
current best estimate of future investments and is based on future
transmission forecasts and the need to upgrade the grid. The
estimated grid investments included in the plan amount to roughly
four billion euros, including 6,100 kilometres of new transmission
line and 128 substation projects.
In 2023, some EUR 310 million were invested in the main grid.
During the year, altogether 15 substation projects and roughly 60
kilometres of transmission lines were completed. A total of 555
kilometres of transmission lines were under general planning, and
six projects were in the environmental impact assessment phase.
During the period under review, investment decisions were made to
build 254 kilometres of transmission line.
The construction of the most important main grid investment of
the decade, the 400-kilovolt Aurora Line cross-border connection,
which will strengthen electricity transmission capacity between
Finland and Sweden, moved forward as planned and in October, the
government issued the expropriation permit for the construction of
the project’s second phase. Some of the more significant
transmission line projects in Finland during the reporting year
were the upgrading of the 400-kilovolt Lake Line transmission line
in the area between Kajaani, Iisalmi and Lapinlahti, increasing the
north–south electricity transmission capacity, and the 400-kilovolt
underground cable connection being built in Helsinki, to increase
transmission capacity to match the growth in the capital region’s
electricity consumption.
In 2023, Finland’s main grid comprised some 14,500 kilometres of
transmission lines and 128 substations. The main grid represents a
totality of assets amounting to several billion euros, which is
why, besides building a new network, high-quality maintenance
management and correctly timed replacement investments are also
important components of the main grid’s life-cycle management.
Fingrid’s asset management has been certified since 2016 according
to the international ISO 55001 standard. In the review year’s
International Transmission Operations and Maintenance Study
(ITOMS), Fingrid once again received the highest grade for the
system security of its main grid, and the maintenance costs in
relation to system security were lower than the average.
Power system
In early 2023, electricity consumption fell, but recovered to
its usual level towards year-end. Electricity consumption in
Finland amounted to 79.8 (81.6) terawatt hours in 2023. Fingrid
transmitted a total of 71.7 (70.1) terawatt hours of electricity in
its grid, representing 83.1 (78.4) per cent of the total
transmission volume in Finland (consumption and inter-TSO). The
volume of transmission losses in the main grid remained at the
level of the previous year, 1.6 (1.6) terawatt hours. This was 2.2
per cent of Fingrid’s total transmission volume.
In winter 2022–2023, electricity consumption peaked at 12,192
(13,767) MWh/h on Thursday 9 March 2023 between 8 and 9 a.m.
Electricity generated in Finland accounted for 11,240 megawatts of
the total consumption, and the remaining share was imported from
Sweden. The area price of wholesale electricity in Finland was EUR
158.09/MWh during the peak consumption hour. The consumption
peak for the entire year, 13,210 MWh, was reached on 27 November
2023 between 5 and 6 p.m.
In 2023, 10.7 (16.6) terawatt hours of electricity was imported
from Sweden to Finland, and 2.2 (1.2) terawatt hours was exported
from Finland to Sweden. The electricity transmissions between
Finland and Estonia were dominated by exports from Finland to
Estonia, totalling 7.0 (6.8) terawatt hours. In 2023, 0.4 (0.4)
terawatt hours of electricity was imported from Norway to Finland.
During the year under review, the usability and reliability of
transmission connections between Finland and Sweden and Finland and
Estonia were good.
Transmission reliability reached its best-ever result during the
review period and amounted to 99.99995 (99.99993) per cent. An
outage in a connection point in the main grid caused by a
disturbance in Fingrid’s transmission system lasted an average of
0.8 (4.7) minutes. The cost of the disturbances (regulatory outage
costs) was EUR 3.6 (4.7) million. The calculation is based on the
calculation model approved by the Energy Authority.
Countertrade costs arise from, among other things, transmission
grid disturbances and problem situations. In the year under review,
countertrade costs totalled EUR 0.9 (7.3) million. The decline in
costs was due to the good reliability of cross-border connections
and the lower price of electricity compared to the previous
year.
Electricity market
In the electricity market, the price of electricity fell as a
whole. This was the result of, among other things, a mild winter,
the good hydrological situation that continued throughout the year
and the regular electricity production that took off at Olkiluoto 3
in April. A new topic of discussion on the electricity market was
the large fluctuations in the electricity price. Behind the price
fluctuations can be found the disappearance of balancing power as
the energy system becomes cleaner, the increase in
weather-dependent electricity production, the impacts of the
expansion of the electricity market on the electricity price
formation, and Finland’s location between two different price
areas.
Fingrid’s congestion income from cross-border transmission lines
totalled EUR 317.0 (942.9) million. Congestion income between
Finland and Sweden totalled EUR 114.9 (775.6) million. The links
between Finland and Estonia generated EUR 145.1 (167.4) million in
congestion income.
To increase the cross-border transmission capacity between
Finland and Sweden, a third AC connection, called the Aurora Line,
is under construction in cooperation with the Swedish TSO and is
planned for completion in 2024. The construction of a fourth
connection line between Finland and Sweden is planned for the early
2030s. Also EstLink 3, the third submarine cable to Estonia, is at
the planning stage. The increased transmission capacity will
support a decrease in the price disparities between the
countries.
Fingrid and the Estonian TSO Elering have in use financial
transmission rights (FTR) for the Finland–Estonia border, allowing
them to reserve transmission capacity and support the operations of
the wholesale electricity market. Transmission rights give market
operators new opportunities to hedge electricity prices in
long-term electricity trade. During the year under review, all
auctions were implemented as planned and transmission rights were
granted in full, taking into account the maintenance of the EstLink
cross-border connections. At the end of the review period, Fingrid
submitted to the Energy Authority its proposal for improving the
price risk hedging opportunities between Finland and Sweden.
Fingrid proposed investments and other development measures that
promote the effectiveness of the physical electricity market and
financial markets for electricity.
Fingrid’s task is to develop the electricity market. Several
significant modernisations are currently being implemented on the
electricity market and this will continue in upcoming years, taking
the electricity market in a more real-time and market-driven
direction. Key projects include the Nordic Imbalance Settlement
Model and transmission capacity calculation development. Moreover,
a wide array of development work is under way to promote the market
entry of flexible resources that support the effectiveness of the
electricity system.
Finland switched to a 15-minute imbalance settlement period on
22 May 2023, based on the Energy Authority’s decision. In addition
to imbalance settlement, a large proportion of the power system’s
measurements switched over to the 15-minute resolution,
simultaneously enabling Finland’s intraday markets’ trading using
15-minute products.
In order to ensure efficient grid operation and system security,
the Nordic TSOs are preparing a new flow-based transmission
capacity calculation method. The goal is to adopt the new
calculation method in the final quarter of 2024.
The changes in the electricity system will increase the need for
reserves in balancing the power system. The automated Nordic mFRR
energy markets will be adopted in December 2024. The reserve
markets are also expanding into Europe. Fingrid is preparing to
connect to PICASSO, the European market platform for the automatic
Frequency Restoration Reserve (aFRR), in summer 2024.
Simultaneously, European aFRR energy market will be established in
Finland. Also under preparation is connecting in the future to the
European mFRR energy markets’ MARI market platform.
Personnel
Changes in the operating environment have significantly affected
the number, tasks and skill requirements of Fingrid’s personnel.
The drivers behind these changes are the energy transformation and
the unprecedented grid construction programme in support of it, as
well as the requirements for the development of the electricity
market.
The number of personnel has grown significantly in recent years.
Fingrid Oyj employed 544 (489) persons, including temporary
employees, at the end of the year. The number of permanent
personnel was 493 (439) and the average age was 43 (43). At the end
of the year, 26 (25) per cent of the personnel were women and 74
(75) per cent were men.
A comprehensive PeoplePower survey was carried out in 2023.
According to the results, Fingrid’s strengths include atmosphere at
work, leadership and business culture, trust in the employer and
commitment. Fingrid maintained its excellent AAA PeoplePower
rating, with an index of 83.9 on a scale from 1 to 100. Only around
six per cent of all the surveyed organisations annually achieve the
AAA rating. The company’s employees gave Fingrid a net promoter
score (eNPS) of 75.
Based on the PeoplePower survey results, Fingrid was awarded the
Finland’s Most Inspiring Workplaces recognition in the mid-sized
companies category in 2023.
Legal proceedings and proceedings by
authorities
Teollisuuden Voima Oyj (“TVO”) lodged a request for an
investigation with the Energy Authority on 25 May 2022 related to
the claims by TVO that Fingrid has neglected its obligation to
develop the main grid as stated in the Finnish Electricity Market
Act and/or other applicable legislation, and that, as a result, it
has placed unlawful restrictions on connecting the Olkiluoto 3
nuclear power plant to the grid, and that Fingrid is in breach of
its administrative obligations linked to carrying out its public
administrative task. Fingrid’s view is that the claims made by TVO
are unfounded. Fingrid lodged a statement of defence with the
Energy Authority concerning the claims made by TVO in its request
for an investigation.
The EU Agency for the Cooperation of Energy Regulators (ACER),
on 14 September 2022, made a decision on long-term price risk
hedging opportunities between Finland and Sweden. In its decision,
ACER requested that the Finnish and Swedish TSOs ensure the
availability of other long-term cross-zonal hedging products and
develop the necessary arrangements for providing hedging
products. Fingrid filed an appeal against the decision to
ACER’s Board of Appeal on 14 November 2022. The Board of Appeal
issued its resolution on the appeal on 24 October 2023, where it
confirmed ACER’s original decision. Fingrid submitted to the Energy
Authority on 22 December 2023 its proposal for improving the price
risk hedging opportunities between Finland and Sweden.
Fingrid received an expropriation permit for the widening of the
Torna–Lautakari right-of-way for the neutral line on 27 October
2022. In the kick-off meeting for the expropriation procedure on 1
December 2022, the expropriation committee decided that the
expropriating party is obligated to assume responsibility for the
tree stands within the scope of the rights and restrictions set in
the expropriation permit, unless otherwise agreed. The final
meeting of the expropriation procedure was held on 16 November
2023. Fingrid has appealed the decision concerning the
Torna–Lautakari tree stands’ expropriation to the Southwest Finland
District Court’s Land Rights Court on 22 December 2023.
On 20 December 2023, Fingrid Datahub Oy filed an appeal with the
Energy Authority on the model concerning Fingrid Datahub Oy’s
financial regulation for the regulatory period 2024–2027 and
simultaneously proposed that the regulatory model be developed
further.
Events after the review period and future
outlook
Fingrid Group’s result for the 2024 financial period, excluding
changes in the fair value of derivatives and before taxes, is
expected to increase compared to 2023. This estimation includes the
recognition of congestion income in the company’s turnover and
other operating income. The implementation of the investment
programme is proceeding, which raises the level of investments in
2024. Increasing weather dependence in electricity production poses
a challenge to forecasting electricity transmission and increases
fluctuations in the national power balance and its maintenance. The
availability and price of flexible power production and power
system flexibility will influence the cost of the reserves
necessary for managing the power balance and safeguarding system
security. Fluctuations in the electricity market prices and
availability of flexibility will increase uncertainty in the
company’s market-based costs. The company’s debt service capacity
is expected to remain stable.
On 21 September 2023, Fingrid announced that it will waive grid
service fees for January, February and June of 2024. The company
moreover plans to waive grid service fees for three other months in
the latter half of 2024. A separate decision on that will be made
by summer 2024. The goal is also, in future, to use congestion
income actively for investments that will increase cross-border
transmission capacity and to cover operating costs to benefit
Fingrid’s customers.
On 2 January 2024, Fingrid appealed the Energy Authority’s
decision on the terms and conditions of balance service. The appeal
mainly concerns the collateral model for balance responsible
parties presented in the decision. In November 2023, the Energy
Authority issued a decision on the terms and conditions for balance
responsible parties, which include the principles for how
collateral requirements are determined. The Energy Authority’s
decision includes major changes to the current collateral terms and
conditions and sets apart Finland’s collateral model from that used
in other Nordic countries. The most significant changes to the
current collateral model include a major reduction in the required
collaterals, elimination of the requirement to provide an adequate
additional collateral and a possible collateral ceiling.
On 29 January 2024, Fingrid appealed the Energy Authority’s
decision on the methods concerning the specification of the profit
for the electricity transmission grid operations for the sixth
regulatory period 1 January 2024–31 December 2027 and seventh
regulatory period 1 January 2028–31 December 2031 at the Market
Court. According to Fingrid’s assessment, the decision on the
regulatory methods is a significant weakening of the electricity
transmission grid operations’ reasonable profit regulatory method
that expired at year-end. In Fingrid’s view, the assessment of
impacts in preparing the regulatory model decision has been
deficient and there are still issues open to interpretation related
to the presented decision. Fingrid’s goal is a solution that would
also enable the future development of the grid, allowing the
hundreds of billions in green transition investments in Finland to
be implemented as planned.
On 15 February 2024, Fingrid appealed the decision given by the
Energy Authority on 11 January 2024 on the scope of the national
transmission system operator’s systems responsibility regarding the
grid connection of the OL3 nuclear power plant at the Market Court.
Teollisuuden Voima Oyj (“TVO”) lodged a request for an
investigation with the Energy Authority on 25 May 2022 related to
the claims by TVO that Fingrid has neglected its obligation to
develop the main grid as stated in the Finnish Electricity Market
Act and/or other applicable legislation, and that, as a result, it
has placed unlawful restrictions on connecting the Olkiluoto 3
nuclear power plant to the grid, and that Fingrid is in breach of
its administrative obligations linked to carrying out its public
administrative task. The Energy Authority states in its decision on
11 January 2024 that Fingrid fulfilled its development, connection
and transmission obligations in accordance with the Electricity
Market Act. The Energy Authority also found the 1,300 MW power
limit specified in Fingrid’s connection terms justified and did not
find Fingrid to have restricted Olkiluoto 3’s access to the
grid.
HiQ Finland Oy (named changed on 6 February 2024 to Frends
Technology Oy) presented a claim for a revised decision and filed
an appeal with the Market Court on Fingrid’s procurement decision
related to the procurement of the user license for an integration
platform on 6 February 2024. On 16 February 2024, Fingrid revoked
its procurement decision and reported on 19 February 2024 to the
Market Court that the procurement decision had been revoked.
Following the revoking of the procurement decision, the Market
Court will decide on the claim for legal costs presented by HiQ
Finland Oy. Fingrid considers the claim for legal costs to be
excessive.
Board of Directors’ proposal for the distribution of
profit
The guiding principle for Fingrid’s dividend policy is to
distribute substantially all of the parent company profit as
dividends. When making the decision, however, the economic
conditions, the company’s near-term capital expenditure and
development needs as well as any prevailing financial targets of
the company are always taken into account.
Fingrid Oyj’s parent company’s profit for the financial year was
EUR 141,421,233.34 and distributable funds in the financial
statements total EUR 174,350,037.55. Since the close of the
financial year, there have been no material changes in the
company’s financial position and, in the Board of Directors’ view,
the proposed dividend distribution does not compromise the
company’s solvency.
After the closing date, the Board of Directors has proposed to
the Annual General Meeting of shareholders that, on the basis of
the balance sheet adopted for the financial period that ended on 31
December 2023, a dividend of EUR 54,100.00 at maximum per share be
paid for Series A shares and EUR 19,800.00 at maximum for Series B
shares, for a total of EUR 137,110,400.00 at maximum. The dividends
will be paid in two instalments. The first instalment of EUR
36,000.00 for each Series A share and EUR 13,200.00 for each Series
B share, totalling EUR 91,268,400.00 in dividends, will be paid on
26 March 2024. The second instalment of EUR 18,100.00 at maximum
per share for each Series A share and EUR 6,600.00 at maximum per
share for each Series B share, totalling EUR 45,842,000.00 at
maximum in dividends, will be paid according to the Board’s
decision after the half-year report has been confirmed, based on
the authorisation given to the Board in the Annual General Meeting.
The Board has the right to decide, based on the authorisation
granted to it, on the payment of the second dividend instalment
after the half-year report has been confirmed and it has assessed
the company’s solvency, financial position and financial
development. The dividends that have been decided on with the
authorisation given to the Board will be paid on the third banking
day after the decision. The authorisation is proposed to remain
valid until the next Annual General Meeting.
Annual General Meeting 2024
Fingrid Oyj’s Annual General Meeting is scheduled to be held on
21 March 2024 in Helsinki.
In Helsinki, on 27th February 2024
Fingrid Oyj
Board of Directors
- Financial Statements Bulletin 2023
- Corporate Governance Statement 2023
- Remuneration Report 2023
- Annual Review and Financial statements 2023
- ESEF Report 2023
Fingrid 29 (LSE:38FE)
過去 株価チャート
から 11 2024 まで 12 2024
Fingrid 29 (LSE:38FE)
過去 株価チャート
から 12 2023 まで 12 2024