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FINGRID O YJ Annual Report 2011

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FINGRID OYJ Annual Report 2011 Fingrid. Powering Finland. FINGRID OYJ, Arkadiankatu 23 B, P.O. Box 530, FI-00101 Helsinki, Finland Tel. +358 30 395 5000, fax +358 30 395 5196, www.fingrid.fi I41200550_Fingrid_Kannet_EN.indd 1 13.3.2012 17.34 Contents of annual report and reporting principles Fingrid draws up the consolidated financial statements and interim reports in accordance with the IFRS reporting standards accepted by the European Union and in accordance with the Finnish Se- curities Market Act. The annual review and the financial statements of the parent company of the Group are prepared in accordance with the Finnish Accounting Act as well as the guidelines and statements of the Finnish Accounting Standards Board. The information on personnel is based on the calculation systems used by human resource management, and the calculation of the rel- evant information is in compliance with the general guidelines of the Finnish Accounting Stand- ards Board concerning the preparation annual reviews. The environmental data is collected from the information reported to the authorities and from the company’s own data compilation systems. An external emissions trading verifier has verified our carbon dioxide emission report. In other re- spects, the corporate responsibility information has not been verified. Sustainability reporting covers the economic, social and environmental impacts of Fingrid Group’s own operations in 2011. We apply the international GRI G3.0 (Global Reporting Initiative) report- ing guidelines for the first time to our sustainability reporting. Moreover, we report selected indi- Graphic design and layout: cators stated in GRI’s Electric Utility Sector Supplement. Page 38 contains a table describing the Mainos- ja viestintätoimisto BBO Oy correspondence between the GRI guidelines and this report. We have estimated ourselves that our reporting is equivalent to Application Level C of GRI. The application level has been verified by a Photographs: third party, PricewaterhouseCoopers Oy. In reporting, we focus on the most pertinent themes and Fingrid Oyj, Juhani Eskelinen, Jonna Monola, follow the applicable sections of the reporting guidelines for state-owned enterprises in Finland. Utte Ekholm, Egert Kamerik, Rodeo, Vastavalo, Our objective is to develop our data compilation systems related to sustainability issues and our Future Image Bank, Istock sustainability reporting together with the related indicators comprehensively and in a balanced manner between the various sectors. Printing: Lönnberg Painot Oy 2012 Fingrid reports its sustainability issues annually in the annual report. The reporting period for sus- tainability reporting is the financial year of 1 January to 31 December 2011. Fingrid’s previous an- Paper: nual report was published on 3 May 2011. Feedback and questions concerning sustainability can Galerie Art Matt 250 g/m2 be sent to viestinta@fingrid.fi. Galerie Art Matt 130 g/m2 I41200550_Fingrid_Kannet_EN.indd 2 13.3.2012 17.34 Contents 4 Fingrid Oyj in brief 6 Review by the CEO 8 Customers and stakeholders – Grid service at increasingly unambiguous terms 14 Corporate finances – Persistent uncertainty in the financial market 16 Power system – Serving society as a whole 18 Electricity market – More transparency to the market 20 Grid development and maintenance – Evolving grid 24 Research and development – R&D to support business and expertise 26 Land use and environment – Environmental responsibility as part of everyday efforts 30 Personnel – Full of power 34 Sustainability management – Sustainable approach at Fingrid 38 GRI Content Index 40 Corporate Governance Statement 48 Board of Directors 50 Executive management group 52 Report of the Board of Directors and financial statements 2011 I41200550_Fingrid_VSK_EN.indd 3 21.3.2012 11.42 Fingrid Oyj in brief Fingrid Oyj is a Finnish public limited liability company Fingrid is owned by the State of Finland (holding responsible for electricity transmission in the high- 53.1%), Mutual Pension Insurance Company Ilmarinen voltage transmission system in Finland. (19%) and other institutional investors (27%). Fingrid’s nation-wide grid is an integral part of the pow- The company was established on 29 November 1996. er system in Finland. The transmission grid is the high- Operations started on 1 September 1997. voltage trunk network which covers the entire Finland. Major power plants, industrial plants and regional elec- Revenue 438 million euros. tricity distribution networks are connected to the grid. Balance sheet total 1.97 billion euros. The Finnish power system is part of the inter-Nordic power Owns 20 per cent of electricity exchange Nord Pool system. The inter-Nordic system is connected to the system Spot AS. in Continental Europe by means of high-voltage direct cur- Number of personnel at the end of the year: 266 rent transmission links. Moreover, there are high-voltage (252 in permanent employment). direct current links from Finland to Russia and Estonia. Fingrid is headquartered in Helsinki, and the company Fingrid is responsible for planning and monitoring the also has offices in Hämeenlinna, Oulu, Petäjävesi, operation of the Finnish electricity transmission sys- tem and for maintaining and developing the system. The Rovaniemi and Varkaus. company is also to contribute to the work of ENTSO-E, the European Network of Transmission System Operators Fingrid’s mission for Electricity, to the preparation of European electrici- ty market and system operation codes, and to European As the transmission system operator in Finland, Fingrid’s network planning. mission is to: The transmission system in Finland encompasses approx. develop the power system 14,000 kilometres of 400, 220 and 110 kilovolt transmis- transmit electricity reliably sion lines plus more than 100 substations. promote the functioning of the electricity market. Fingrid provides its contractual customers, in other words electricity producers, network companies and in- Fingrid’s values dustrial enterprises, with system, cross-border transmis- sion and balance services. Fingrid serves the electricity transparency market by attending to adequate electricity transmission impartiality capacity, by removing transmission restrictions between efficiency countries, and by providing information on the electrici- responsibility ty market. Fingrid makes sure that Finland obtains electricity with- Fingrid’s vision out disturbance. In the next few years, almost 3,000 kilo- metres of new transmission lines and about 30 substa- Fingrid’s vision is to be the international forerunner in tions will be constructed in Finland. transmission system operation. FINGRID OYJ 4 I41200550_Fingrid_VSK_EN.indd 4 21.3.2012 11.42 Fingrid Oyj’s power transmission ggridrid 1 January 2012 400 kV grid (4,300 km) 220 kV grid (2,600 km) 110 kV grid (7,500 km) Fenno-Skan 1 submarine cable 40000 kV ((100100 kmkm)) Fenno-Skan 2 submarine cable 50000 kV ((100100 kmkm)) lines of other companies Base map © Karttakeskus Oy, Permit L9505/12 Fingrid Oyj, organisation Jukka Ruusunen, President & CEO Grid service Stakeholder Power system Asset System Finance and Market relations operation management development business development development Adequacy of transmission system System operation Promotion of market functioning 5 Annual Report 2011 I41200550_Fingrid_VSK_EN.indd 5 21.3.2012 11.42 Review by the CEO The year 2011 will be remembered as the year when more there were more disturbances than normal in the transmis- money than ever before was invested in the Finnish high- sion grid. The Finnish grid also survived the heavy storms voltage electricity transmission system. Fingrid’s capital ex- towards the end of the year with little consequences. Good penditure totalled approx. 240 million euros. Even though system security is not something that is taken for grant- our company will invest a total of some 1,700 thousand mil- ed, and the transmission system operator must always be lion euros in the transmission system in the next 10 years, prepared for the worst case scenario. Along with climate the annual capital investments will probably not exceed the change, extreme weather phenomena will probably be more capital expenditure level of 2011 for a long time to come. commonplace in the future. For such eventualities, the trans- The extraordinarily high level of capital investments in eu- mission system must be kept in a good condition, and we ros is explained by the fact that several large-scale construc- need to enhance our operations. One good example of this tion projects were in progress concurrently. was the largest power failure exercise ever arranged in Fin- land in May. In addition to Fingrid’s active contribution, the We are building the transmission system to conform to the other participants comprised a record-high number of repre- needs of our customers and the Finnish society. The excep- sentatives of electricity companies and authorities. tionally severe storms experienced in Finland towards the end of 2011 once again reminded us that a reliable electric- In terms of the electricity market, 2011 was a year of trans- ity supply at all times is of paramount importance to mod- mission congestions. The Nordic hydropower production vol- ern society. A well-functioning electricity market ensures ume varied more than ever before, which is why electrici- that electricity is produced, consumed and transmitted as ty transmission networks were hard pressed. Large volumes efficiently as possible. Fingrid is hard at work to connect of electricity
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