Fortum Oyj is a Finnishstate-owned energy company located in Espoo, Finland. It mainly focuses on the Nordic region.[1] Fortum operates power plants, including co-generation plants, and generates and sells electricity and heat. The company also sells waste services such as recycling, reutilisation, final disposal solutions and soil remediation and environmental constructions services, and other energy-related services and products e.g. consultancy services for power plants and electric vehicle charging. Fortum is listed on the Nasdaq Helsinki stock exchange.
As of 2023 Fortum was the third-largest power generator in the Nordics.[2]
History
Imatran Voima (1932–1997)
The predecessor of Fortum was Imatran Voima (IVO), which was founded in 1932 to operate the Imatrankoski hydroelectric power plant in Imatra.[3]
The construction of the Imatra power plant began already in 1922 as well as the power lines from Imatra to Helsinki and the power plant was opened in May 1929.[3]Finnish Government made a decision to establish Imatran Voima Osakeyhtiö (IVO) in May 1932.[3]
Imatran Voima acquired and built a number of other power plants, such as the largest hydroelectric power plants along the Oulujoki river, Ingå and Naantali coal-fired powerplants and the Loviisa nuclear power plant.[citation needed]
In 1997, a merger agreement was made between Neste and IVO.[3]
1998–2010
Fortum Corporation was founded in 1998. It was created from the merging of Imatran Voima and Neste Oy, the Finnish national oil company.[4]
In 2005 most of Neste's assets were divested into a separate stock-listed company Neste Oil.[6]
In 2007, Fortum acquired 25.66% stake in TGK-1, operating in northwest Russia.[7] In 2008, Fortum privatized the natural gas, power and heat generation company TGK-10 (now: OAO Fortum [fi]), operating in central and northern Russia.[8]
In 2014 Fortum sold its Norwegian electricity distribution network and also its stakes in Fredrikstad Energi and Fredrikstad Energi Nett to the Hafslund Group. The heat business was sold to iCON Infrastructure Partners II, L.P. fund.[18] Since 2015 the electrical distribution network in Sweden is owned by Ellevio.[citation needed]
In 2015, Fortum completed the divestment of its electricity distribution network in Sweden, thus completing the divestment of electricity distribution business.[citation needed] In 2016, Fortum acquired Grupa DUON S.A, an electricity and gas sales company in Poland, and Ekokem Corporation, a leading Nordic circular economy company specialised in material and waste recycling, final disposal solutions, soil remediation and environmental construction.[citation needed]
In 2017, the 100 MW plant in Pavagada solar park was connected to the grid. It was the first of a series of planned gigawatt-scale plants facilitated by reverse auctions in India.[21] In September, Fortum announced it would buy E.ON's 47% stake in German power company Uniper.[22] Fortum increased its stake to 75% in spring 2020.[23] Uniper mainly uses oil, natural gas and coal to supply electricity.[24]
In 2020 Fortum was the biggest company in Finland by its revenue.[26] The majority of its income came from Uniper[27] that became Fortum's subsidiary in March 2020.[28]
On 21 September 2022, Fortum announced that Uniper is to be fully divested to the German state.[29] Under the agreement, Uniper plans to issue 4.7 billion new ordinary registered shares, which the Federal Republic of Germany plans to subscribe at a nominal value of EUR 1.70 per share. The German state-owned KfW bank will provide Uniper with additional liquidity support as required until this EUR 8 billion capital increase is completed. Uniper was thus nationalised by Germany on the 21 September 2022 for 8 billion euros.[30]
At completion of the capital increase, the Germans plans to buy all of Fortum's approximately 293 million shares in Uniper for EUR 1.70 per share, i.e. for a total of EUR 0.5 billion. At that point, change of control clause in the financing agreement will be triggered and the buyer will provide the financing for the redemption of Fortum's EUR 4 billion shareholder loan granted to Uniper and the release of the EUR 4 billion parent company guarantee.[citation needed]
The parties have also agreed that Fortum will have a right of first offer in case Uniper intends to divest all or parts of its Swedish hydro and nuclear assets until the end of 2026.[citation needed]
2023-present
In April 2023, Fortum's Russian assets were transferred under external management by decree of the President of Russia, as a response to the confiscation of Russian property in Europe. Fortum considered the decision illegal and wrote off assets from the balance sheet, recording a loss of 1.7 billion euros.[31][32]
In July 2023 Russia announced it was changing the name of the Russian business to Forward Energo.[33]
In February 2024 Fortum launched arbitration proceedings against Russia, seeking compensation for its assets seized by Russian authorities.[34]
Hydropower is one of the most significant renewable electricity production form for Fortum.[23] In 2021 Fortum owned or co-owned over 150 hydropower plants in Finland and Sweden, including power plants on the Dalälven, Indalsälven and Ljusnan rivers in central Sweden and on the Oulujoki, Kemijoki and Vuoksi rivers in Finland.[35]
Fortum sells electricity, electricity products and services to 1.3 million customers in Sweden, Finland, Norway and Poland. In 2014, Fortum closed its 1,000 MW coal power plant at Ingå (Finland) and demolished it in 2020.[37] The company also owns and operates about 1,200 km (750 mi) of district heat network in Finland, 2,400 km (1,500 mi) in Sweden, 860 km (530 mi) in Poland and 480 km (300 mi) in Russia.[citation needed]
Solar power
The company has stated that its ambition is to build a small photo-voltaic solar portfolio to gain experience in different solar technologies and in operating in the Indian power market.[38] Fortum also sells solar power kits in the Nordic countries.[citation needed]
Recycling and waste solutions
Fortum provides environmental management and material efficiency services in the Nordics. Services include recycling, reutilisation, and final disposal solutions, as well as soil remediation and environmental construction services.[citation needed]
Environmental record
In 2014 Fortum had the biggest market share of ecolabelled electricity in Finland.[39] Nowadays, they no longer offer ecolabelled electricity in Finland.[40]
After acquiring a majority stake in Uniper in 2020,[28] Fortum will become one of the EU's worst emitters of greenhouse gas emissions, asserted a report backed by major European environmental groups in 2019.[41]Extinction Rebellion Finland accused Fortum for greenwashing for continuing and scaling up its fossil fuel business, for example opening (through Uniper) Dateln4 coal-fired power plant in Germany in 2020 and suing the Netherlands on the basis of the Energy Charter Treaty for banning coal.[citation needed]
Social responsibility
In February 2014, Fortum equipped three schools with solar-powered infrastructure in Bhilwara, India, where they had a solar plant.[42]
