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Caruna significantly increased investments into securing the reliability of supply in 2015

Caruna significantly increased investments into securing the reliability of supply in 2015

In 2015, the Caruna Group devoted MEUR 173 (2014: 112) into its network improvement programme for the benefit of Caruna’s customers. This is a sum equivalent to six times the operating profit. The net sales amounted to MEUR 288 (180) and the operating profit to MEUR 26 (-60). Financing costs and depreciations from network assets resulted in a loss of MEUR 140 (151). *

Financing costs play a major role in a capital-intensive sector. The toughened demands for security of supply in the Electricity Market Act require Caruna to invest extensively in improving the reliability of the network.

— Electricity distribution volumes remained lower than normal last year because of the exceptionally warm weather conditions. In 2015, we invested a sum equivalent to six times our operating profit into our network, which makes it a relevant factor in terms of our financial performance. We showed a loss due to both the depreciations from our network assets, comprising of 80,000 km of power lines, and financing costs. This process is part of a decade-long network improvement programme we are systematically implementing, explains Caruna's CEO Ari Koponen.

In addition to warm weather one-off discounts of Caruna Espoo Oy, a Caruna Group member company, caused our net sales to remain low last year. The total amount of these discounts came up to MEUR 18, which we refunded to our customers in accordance with the regulation limits.

Operations adapted to suit an electricity distribution company operating in Finland

2015 was the first complete operating year for Caruna. During the year, we adapted our internal organisation and processes to better fit an electricity distributor operating in Finland and moved into our own premises. This reduces our future yearly operative costs by approximately MEUR 10 on a permanent basis.

— During the past year Caruna launched its own customer service unit dedicated to looking after Caruna's electricity distribution customers and outsourced project management functions to Rejlers. As a result, our project supervision capacity is sufficiently scalable as the number of our projects grows significantly. It also allows us to ensure our projects are always carried out to the best quality, Koponen continues.

In 2015, Caruna Oy, a Caruna Group company, acquired Lapin Sähköverkko Oy and the electricity network it operated from Kemijoki Oy. The acquired high voltage network extends Caruna’s electricity distribution network in Lapland, where we already operate other network sections. Approximately 150 km of high voltage network in Kemijärvi, Rovaniemi, and Sodankylä were transferred to Caruna Oy with the acquisition.

The highest amount of solar energy in a network

Small-scale and decentralised energy production is becoming increasingly more popular in Finland. A 2015 survey by the Energy Authority showed that small-scale production doubled in volume last year. Caruna can boast of the highest number of solar power systems connected to its network; a total of 2,300 kWp (1,030 kWp in the Southwest Finland region and 940 kWp in the Uusimaa region).

— The majority of small-scale production comes from solar power systems of private households. We develop our networks to enable renewable energy production systems run by private homes to be connected to the system on a wide scale, Koponen states.

100% of dismantled materials processed

Enhancement of material efficiency is one of Caruna's focus areas.

— The re-use rate of materials dismantled during network improvement projects will increase to 100% in the future. All dismantled materials are processed by Kuusakoski Oy. We also want to pay even more attention to ensuring that new materials used in our network improvements are as environmentally friendly as possible, Koponen concludes.

*The financial statement for the Caruna Group was issued for the first time in 2014. However, out of the Group’s companies Caruna Oy and Caruna Espoo Oy were consolidated into group during April 1st - December 31st. Therefore, the figures for 2015 and 2014 are not fully comparable.

Please find further details of the Caruna report 2015 at http://report2015.caruna.fi
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