Facts and figures

3

Sustainable business and responsibility

• Fortum‘s mission is based on sustainable business

• Sustainability means economic and social responsibility in every-day activities of a company

• Honesty, respect and creativity is the basis of Fortum‘s activities

• Fortum continuously strives to:− develop sustainable energy projects

− contribute to the reduction of carbon dioxide emissions

− be a socially responsible company

The main objective is

to produce energy improving the quality of life of current and future generations.

4

Figures about Lithuania• Population - 3 mln.

• The main energy projects:

– Nuclear power plant;

– LNG terminal (under construction);

– Electrical connections with Sweden (under construction) and Poland;

– Gas connection with Poland;

– Biofuel projects.

Prices:

– Electricity –46,2 EUR/MWh

– Gas – 43,97 EUR/m³

– Biofuel – 19,85 EUR/MWh

Demand:

– Electricity – 10.6 TWh

– Gas – 3.3 mlrd. m³

– Heat – 9.01TWh/ 27,2% from RES

5

Fortum in Lithuania

Fortum Klaipėda

• Established in.......................2007

• Investments…....130 million EUR.

Fortum Švenčionių energija

• Established in….................2001

• Investments…......5 million EUR.

Fortum Joniškio energija

• Established in….....................2000

• Investments….......3,9 million EUR.

Fortum Ekošiluma

• Established in…............... 2003

• Investments….....1 million EUR.

Waste management

7

Swedish example

8

Municipal waste amountsKg per capita in the EU countries in 2010

EU-27 co

untries

Cyprus

Luxembourg

Denm

ark

Irelan

d

Netherl

ands

Malt

a

Austria

German

ySpain

France

Italy

United K

ingdom

Portugal

Finlan

d

Belgiu

m

Sweden

Greece

Sloven

ia

Hungary

Bulgari

a

Lithuan

ia

Roman

ia

Slovak

ia

Czech

Rep

ublic

Poland

Estonia

Latvia

0

100

200

300

400

500

600

700

800

502

381

315

9

Collected amount of municipal wasteIn thousands of tons in major cities of Lithuania in 2010

Vilnius Kaunas Klaipėda Panevėžys Šiauliai

199.5

141.3

76.3

57.844.7

10

Municipal waste managementIn EU countries in 2010

EU-27 co

untries

German

y

Netherl

ands

Austria

*

Belgiu

m

Sweden

Denm

ark

Luxembourg

France

Finlan

d

United K

ingdom

*

Italy

*

Irelan

d

Sloven

iaSpain

Portugal

Czech

Rep

ublic

Hungary

Poland

Estonia

Cyprus

Slovak

ia

Greece

*M

alta

Latvia

Lithuan

ia

Roman

ia

Bulgari

a0%

20%

40%

60%

80%

100%

Disposal of municipal waste in landfills RecyclingComposting Incineration

11

Municipal waste managementin the European Union

1995 2000 2005 2010

6857 57

38

15

16 16

22

1116 16

25

6 11 11 15

Composting

Recycling

Incineration

Landfilling

12

Use of secondary raw materialsin Lithuania in 2010

577,000 tons

59,000 tons

105,000 tons

16,000 tons27,000 tons

Metal

Glass

Paper

Tires

Plastics

13

Municipal waste management techniquesin Lithuania in 2010

94 %

2%

4%

Disposal of municipal waste in landfills

Composting

Recycling

14

Municipal waste management techniquesin Sweden in 2010

1%

14%

49%

36%

Disposal of municipal waste in landfills

Composting

Incineration

Recycling

15

SurveyHow do you rate waste incineration as a source of energy?

14%

68%

18%

Negatively

Positively

I don't have any opinion

The Klaipeda Plant

17

Three challenges

• Municipality

• Society

• Transparency

18

Figures

• 95% of shares – UAB Fortum Heat Lietuva

• 5% of shares – AB Klaipėdos energija

• 130 million EUR – value of the project

• 50 МW – heat capacity

• 15 МW – additional heat capacity from smoke condenser during the winter time

• 20 MW – electric capacity

• 400 GWh – annual production of heat energy

• 140 GWh – annual production of electricity

• 40% of heat amount necessary for Klaipėda heat consumers

19

Facts

• The plant burn up to 245 thousand tons of municipal and industrial waste and biofuel (wood chips)

• The best available technologies (BAT)used in the plant ensure the best method of waste incineration

• All heat produced is transmitted to the Klaipėda city district heating system, while electricity is supplied to common electricity network

• The new Klaipėda plant, where waste will be used as fuel, is the first object of such type in the Baltic countries

• The company employs 35 professionals

• More 30 service agreements

20

Emissions January, %

Carbon m

onoxide

Nitrogen

oxid

es

Sulphur d

ioxid

e

Amm

onia

Total o

rgan

ic ca

rbon

Particl

es

31

82

28 10 10

100 100 100 100 100 100

Average value of the indicator Norm

21

Waste compositionBefore sorting

Waste Percent

Food waste 12

Plastic 11

Plant waste 8

Glass 7

Paper 7

Fabrics 5

Metal 2

Wood 1

Other waste 47

22

Benefits to Klaipėda region and Lithuania

• Decreased dependence on imported fuels

• More stable heat prices

• Reduced costs for building new landfills

• 4 – 5 times smaller amounts of waste disposed in landfill

• Reduced environmental pollution

• Competition of heat suppliers

• One of the largest “green field” investment in Lithuania

• About 35 MEUR civil and constructing works was done by local companies

23

Kaunas Project: Description

• UAB Fortum Heat Lietuva is engaged in the development of the project “Kaunas CHP Plant”, the estimated value of which is about EUR 155 million

• The preliminary place of construction of the planned Kaunas CHP plant is Kaunas Free Economic Zone.

• The total capacity of the planned CHP plant is 100MW, of which thermal energy would account for 60MW and electricity - for 32MW

• All the heat produced, about 560GWh, will be supplied to heat consumers of the city and district of Kaunas; electricity, about 250GWh, will be supplied to the public electricity grid

• The company plans to employ about 40 people

24

Kaunas Project: Benefits

• Dependence on imported fuel (gas) will decline in the supply of heat to the city and district of Kaunas, since a significant share of heat will be generated in this plant

• Increase in price of heat produced out of natural gas would be slowed down and preconditions for the stabilization of a market price would be created

• Costs of the construction of new landfills and operation of the existing ones would decrease, as when using waste in energy production, the amount thereof decreases 4-5 times

• Impact on the formation of greenhouse effect decreases, since emitted landfill gases (methane) have a much greater influence on increasing greenhouse effect than CO2 gas emitted during waste incineration

• New jobs for production, handling and transportation of biomass would be created

• Local construction companies would take part in the construction of the plant

25

Kaunas Project: Developments

• Study of fuel supply has been performed in this project implementation stage

• Project Development Plan and Strategic Environmental Impact Assessment of the solutions thereof has been approved

• Environmental Impact Assessment of the planned economic activity is being carried out

• Construction is scheduled to start in Q1 2015

• Commissioning in Q1 2017

• There are more than 400 plants of such type operating in Europe: about 130 in France, 70 in Germany, 30 in Sweden

Thank You for Your attention!