Further needs for regional power system planning in the Nordics and Baltics Pekka Vile, Senior analyst, Fortum Power and Heat Oy BEMIP Electricity Regional Group meeting 26 October 2016

Fortum’s current geographical presence Nordic countries Power generation 48.8 TWh Heat sales 3.1 TWh Electricity customers 1.3 million Power generation Electricity sales Heat OAO Fortum Power generation 25.7 TWh Heat sales 25.4 TWh Russia Poland Power generation 0.7 TWh Heat sales 3.4 TWh Baltic countries Power generation 0.7 TWh Heat sales 1.2 TWh India Power generation 26 GWh Key figures 2015 Sales EUR 3.5 bn Comparable operating profit EUR 0.8 bn Balance sheet EUR 23 bn Personnel 7,800

Report on Benefits of regional power system planning Gaia Consulting prepared in October 2015 for Fortum a report on regional planning in the Nordic and Baltic electricity market Main conclusions of the report: There is a clear need for regional governance Coordination efforts lack regional focus National priorities influence TSO decisions Agreement on bottleneck income collection exists – but not how it is used Market efficiency benefits need to be captured The Nordic cooperation has demonstrated that a larger market area allows the countries in the region to benefit from the strengths of each other

Alternative operative models for regional governance in power system design Source: Benefits of regional power system planning, Gaia Consulting Oy, 21 October 2015

High SE-FI congestion rents have been collected during recent years - New SE1-FI interconnector would have been paid by the congestion rents from 2013-2015 Sources: Challenges and Opportunities for the Nordic Power System, Nordic TSOs, August 2016; ENTSO-E TYNDP 2016 We should have this as a PCI project to be implemented as soon as possible ! SE1-FI & SE3-FI congestion rents of over 300 MEUR Projects 111 & 96 total cost estimate around 150 MEUR

Stronger interconnections would further increase security of supply and market efficiency in the Baltic Sea Region power market Night-time Nord Pool Elspot flows 24 Oct 2016 at 3-4 with exports from Germany and Poland northwards Peak-hour Nord Pool Elspot flows 24 Oct 2016 at 18-19 with some flows at the full available capacity for the hour Map source: Nord Pool Spot