11 Tomorrow's Sustainable Energy Solutions and Urban Living Anne Brunila Executive Vice President, Corporate Relations and Sustainability Fortum Corporation

22 Contents - Fortum today - Sustainability challenges - Tomorrow's energy system - Smart energy solutions and urban living

3 Foreign investors 30.1% Finnish State 50.8% Other Finnish investors 9.0% Households 7.5%Financial and insurance institutions 2.6% Listed at the Helsinki Stock Exchange 1998 Approximately 100,000 shareholders Among the most traded shares in Helsinki stock exchange Market cap ~19 billion euros Fortum today a leading Nordic power and heat company 31 January 2011

4 Fortum’s geographical presence TGC-1 (~25%) Power generation ~6 TWh Heat sales ~8 TWh OAO Fortum Power generation 16.1 TWh Heat sales 26.8 TWh Russia Poland Heat sales 4.0 TWh Electricity sales 0.1 TWh Baltic countries Heat sales 1.4 TWh Electricity sales 0.3 TWh Distribution cust. ~24,000 Nordic countries Power generation 52.3 TWh Heat sales 20.7 TWh Distribution cust. 1.6 million Electricity cust. 1.2 million Nr 2 Power generation Electricity sales Nr 2 Nr 1 Heat Distribution Nr 1 Key figures 2010 Sales EUR 6.3 bn Operating profit EUR 1.7 bn Personnel 10,600

5 Electricity Solutions and Distribution Division is responsible for Fortum's electricity sales and distribution activities. It consists of two business areas: Distribution and Electricity Sales. Russia Division consists of power and heat generation and sales in Russia. It includes OAO Fortum and Fortum’s slightly over 25% holding in TGC-1. Power Division consists of Fortum’s power generation, physical operation and trading as well as expert services for power producers. Heat Division consists of combined heat and power generation (CHP), district heating and cooling activities and business-to- business heating solutions.

66 Sustainability embedded in the strategy

7 Fortum's carbon exposure among the lowest in Europe Source: PWC & Enerpresse, Novembre 2010 Changement climatique et Électricité, Fortum g CO 2 /kWh electricity, 2009 Average 346 g/kWh DEI Drax RWE CEZ SSE EDP Enel Vattenfall E.ON Dong Union Fenosa GDF SUEZ Europe Iberdrola Fortum total EDF PVO Verbund Fortum EU Statkraft The share of CO 2 -free power generation was 69% of Fortum's total power generation. In the EU, the share was 91% of the power generation and ~100% of the capacity of the ongoing investment programme. Note: Fortum’s specific emission of the power generation in 2010 in the EU were 84 g/kWh and in total 189 g/kWh, 86 % (91 %) emission free in EU and 66 % (69 %) emission free overall. Figures for all other companies include only European generation.

8 Sustainability challenges

99 The need to mitigate climate change What efforts are necessary? * International Energy Agency GTCO Zero growth of global CO 2 emissions Estimated requirement to limit temperature increase to 2 ˚C Global CO 2 emissions Emissions IEA * baseline scenario 8 wedges 6 additional wedges

10 Each single wedge equals for example… 2 million 1 MW wind power plants CCS in 800 large coal-fired power plants Doubling the efficiency of world’s coal-fired power plants Halving car mileage (or halving emissions from all passenger vehicles) 500 Olkiluoto 3 nuclear power plants (1600 MW) A bio crops plantation equaling the total area of India More than km 2 Source: Fortum

11 Tomorrow’s energy system – Solar Economy

12 Our view of the future: Towards Solar Economy. High efficiency Low efficiency Finite resources Large CO2 emissionsInfinite resources Emissions free production Traditional energy production Exchaustible fuels and production that burdens the environment Transition phase Energy efficient, low-emission production forms Solar economy Inexhaustible and emissions-free, solar-based production forms CHP Fossile CCS Nuclear power Bio-CHP CCS + bio-CHP Geothermal Water Wind Sun Wave Nuclear + CHP

13 Ongoing solar energy projects

14 Ongoing wave power projects Seabased 10MW WaveRoller 300kW Tähän kuvakalvo, kartta pienemmäksi ja pääpaino aaltovoimakuviin

15 Increased renewable energy require “smarter” grids and “smarter” consumption Future customers Consumers become producers Energy flows in both directions Intelligent customer gateway enables buying and selling Source: LUT Energy Traditional electricity grids Centralised power production Energy flows in one direction Production adapts to usage Power production based on historical experience Limited opportunities to connect new power production Source: Fortum Centralised and dispersed power production The share of non-adjustable renewable power production increases Production based on real time data Future electricity grids Source: Fortum

16 Wide area fleet managent Transmission Environmental constraints Deregulation Distribution into cables Digitalizing contact centre and services On-line measurements Rapidly increasing information management Wireless everywhere Distribution Consumption Market places Green certificates Branding Distributed generation Internet Electric transportation Smart homes Smart grids Heat pumps District heating Production Source: Fortum Foundation Energy business has changed and keeps on changing….

17 CHP – sustainable and efficient use of resources Losses 25 Losses 48 CHP production 75% efficiency Separate production 52% efficiency Fuel 100 Fuel 100 Electricity 25 Heat 50 Electricity 17 Heat 35

18 Economically viable in small scale One plant – multiple products Renewables competitive to fossil fuels Fuel flexibility Efficient use of resources Large global potential CHP’s advantages

19 District heating has reduced emissions in Stockholm since – 60 % CO2 (carbon dioxide) – 80 % NOx (nitrogen oxides) – 95 % SOx (sulphur oxides)

20 Smart energy solutions and urban living

21 Solar and wave power Biomass pyrolysis Advancing a rapid adoption of electric vehicles New CHP, district heating and cooling solutions Distributed energy production and smart grids Increased nuclear safety and lifetime, nuclear CHP Towards sustainable societies and urban living – Environmentally-benign R&D in Fortum

22 New solutions launched by Fortum Transport solutions Grid management solutions Smart buildings and metering solutions New Business focus areas Distributed electricity production Distributed heat production Microproduction Energy services Heat pumps and micro-CHP (1)

23 Smart Heat – towards future sustainable energy system 23 Electricity, heat, cooling, and gas in one integrated system where we always make use of surplus energy The sustainable energy system of the future We use energy that would otherwise be lost, and use it when it is needed 1.Enables more solar and wind power 2. Increased integration between the heating and electricity systems 3.Heat and cold storage 4.Increased share of local production in buildings 5.Smart grids 6.Electric vehicles and bio gas vehicles We make use of all local energy 1.Recycling turns household waste into electricity, heat, and biogas

24 Sustainable district solution in Espoo District heating network Heat pump facility District cooling network Server centre CHP plant 24

25 Royal Seaport of Stockholm – A prime example of sustainable urban development Vision Royal Seaport – an international benchmark of sustainable urban development Mission and goals Build 10,000 new apartments, 30,000 work spaces and a wide harbour in Fossil fuel free-zone in 2030 CO 2 -emissions less than 1.5 tonne/person by (currently 4.5 tonne/person) Focus areas Efficient use of energy Climate-benign transport solutions Life style -issues

26 In future smart homes, the consumer can easily and effortlessly –Monitor and manage selected devices remotely –Steer the power source between utility grid, local generation and power storage or EV –Automatically utilise dynamic pricing for cost optimisation –Get individualised advice for energy efficiency improvements New common requirement is real-time interactivity Digitalization and smart homes provide real-time interactivity and efficiency

27 Electricity in transport: several development projects ongoing Toyota Prius (PHEV*) VW Passat (BEV) Fiat Doblo (BEV) Th!nk City (BEV*) Different car types Charging units already installed Cooperation in Sweden and Finland Stockholm (Slow) Finland (Slow and fast) Stockholm (Slow) Stockholm (Payment) Stockholm Espoo Karlstad Kurikka Cooperation with Mitsubishi, PREEM and Valmet Automotive *PHEV Plug-in Hybrid Electric Vehicles, BEV Battery Electric Vehicles

28 Thank you!