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Caruna strengthened electricity networks, developed customer experience and reformed its strategy in 2017

Caruna strengthened electricity networks, developed customer experience and reformed its strategy in 2017

Finland’s largest electricity distribution company Caruna continued to invest significantly in its electricity network in 2017. Along with network improvement, Caruna developed its customer experience by renewing the customer management and invoicing system among other measures. Caruna also continued to develop its procurement and materials chain. The new CEO commenced his duties in May, and in the autumn Caruna reformed its vision, values, strategy and organisation. Published today, Caruna’s Annual Report provides a comprehensive account of Caruna’s operations and events in 2017.

For Caruna’s Annual Report 2017, visit report2017.caruna.fi.

In total, Caruna invested EUR 291 million in 2017 in the electricity networks and in operational development. Roughly 6,200 kilometres of its electricity network was moved underground to protect it from adverse weather conditions. Trees were cut along the powerline corridors and a range of technical solutions was employed to improve the network. As a result, more than 45,000 Caruna customers will enjoy even more reliable electricity supply. Caruna’s weatherproof electricity network now reaches around 477,000 customers out of a total of 672,000. In 2017, the cabling rate increased to 45% across Caruna’s entire electricity network, which measures 85,000 kilometres.

Global megatrends, such as climate change, urbanisation and digitalisation, also affect the energy sector. Severe weather fluctuations challenge electricity distribution companies to act quicker and more efficiently in moving the electricity networks underground, safe from adverse conditions. The electricity network must also enable small-scale energy production.

“Society and businesses cannot operate, nor can citizens live their daily lives, without an uninterrupted electricity supply. The network we are building now will serve the needs of our changing society for the next 40 to 50 years. The construction must reflect the changes in the production and consumption of energy, caused by factors such as electrification of traffic and small-scale production of electricity,” said CEO Tomi Yli-Kyyny.

“We plan and build our electricity network in such a way that it will be compatible with the decentralised production of renewable energy. By doing so, we will also enable individuals to contribute to climate change mitigation by producing energy by environmentally-friendly means. At the end of 2017, we already had some 2,400 producers of solar energy in our network,” Yli-Kyyny added.

Along with increasing reliability of supply and enabling small-scale energy production, Caruna improved its customer experience by developing the customer focus of its employees and partners, and by renewing its customer management and invoicing systems. Caruna will introduce new online customer services in spring 2018. 

Caruna’s net sales for 2017 came to EUR 426 million and its net profit for the period to EUR 29 million. Caruna paid EUR 6.3 million in corporation taxes, and accounted EUR 254 million in electricity and value-added taxes to the Finnish government. Approximately half of the distribution fees paid by Caruna’s customers are made up of taxes.

Even more efficient and transparent procurement processes

Caruna continued to develop its procurement process in 2017. In addition to introducing an electronic signature system for the ordering process and supply agreements, Caruna focused on improving the process it uses to purchase network construction materials.

In 2017, Caruna had 13 main contractors and 480 subcontractors building its electricity networks. Caruna’s projects directly employ approximately 2,000 professionals, in addition to its own personnel. Indirectly Caruna provides jobs for 4,000 people. Caruna regularly monitors the activities of all its partners and their fulfilment of the contractual terms.

Caruna’s supplier management concept includes audits. In 2017, an audit was carried out for six suppliers. Of Caruna’s largest contractual suppliers, 11 have now been audited. Together, these 11 suppliers encompass roughly 70% of Caruna’s purchasing value.

Safety comes first in all of Caruna’s construction projects. Caruna carried out nearly 3,000 site inspections and more than 400 safety walks in 2017. Nevertheless, the occupational safety targets for Caruna’s subcontractors were not met. To address this, Caruna and its main contractors launched an action plan to improve subcontractor safety. The action plan will continue in 2018.

Material life cycle analysis launched

Materials, such as cables, transformers and secondary substations, are essential for building and renovating electricity networks. The key raw materials of network building are aluminium, copper and steel. As a rule, new electricity networks are built using new materials. The quality, safety and environmental aspects of the materials used by Caruna are carefully considered both when inviting tenders and during factory audits afterwards.

Caruna buys most of its materials directly, while some are acquired indirectly through contractors. In 2017, Caruna’s direct share in material purchases was increased, especially with regard to cables and transformers. This improves the management of the materials throughout their life cycle, as well as follow-up and reporting.

In 2017, Caruna launched a material life cycle analysis. During the first stage, Caruna will establish how the demolished materials are processed and where they end up after treatment. The analysis is carried out with Kuusakoski Oy, the company responsible for collecting and processing Caruna’s dismantled network materials. The investigation will continue in 2018.

New CEO, strategy and organisation

In May 2017, Caruna’s new CEO Tomi Yli-Kyyny moved to Caruna from his previous position as Vapo Oy’s CEO. Caruna’s strategy, organisation and Management Team were renewed in late 2017.

The three priorities of the new strategy are good corporate citizenship, customer-oriented and efficient business, and growth and new services. The renewed strategy and the updated vision, a million satisfied customers, will direct Caruna’s day-to-day activities.

“We have renewed our vision, values, strategies and organisation. Our new vision and values remind us that we work for the benefit of our customers and the Finnish society. We intend to serve our growing customer base better than ever before, and will provide the best customer experience by guaranteeing an uninterrupted electricity supply every day of the year,” said Yli-Kyyny.

Following the organisational reform, the number of business units was reduced from three to two, as Network Operations and Asset Management were merged to create the Electricity Network business unit. Caruna’s new business units are Electricity Network and Customer Relations. These are supported by Company Services and Strategic Planning, Governance, Compliance and Risks, Personnel, and Communications and Public Affairs.

The changes implemented in the Management Team have reduced the number of Management Team members. These changes are in line with the new strategy and are designed to make the Team more efficient.

Caruna supports the UN Sustainable Development Goals

In late 2017, Caruna launched a process to choose three UN Sustainable Development Goals (SDGs) on which the company’s operations have the most significant impact and which Caruna is committed to promoting.

“We will particularly promote the supply of affordable and clean energy, sustainable industry, innovation and infrastructure, and sustainable cities and communities. Caruna’s strategic priorities are directly connected to these goals,” said Yli-Kyyny.

Along with these three priority goals, the following were also identified as objectives which Caruna seeks to promote in its operations: clean water and sanitation, decent work and economic growth, responsible consumption and production, climate action, life on land, and partnerships for the goals.

Caruna’s corporate responsibility programme will be updated in spring 2018, when Caruna defines more specific indicators for its sustainable development objectives. Caruna will also carry out a new materiality analysis and introduce GRI Standards into the corporate responsibility reporting.

For Caruna’s Annual Report 2017, visit report2017.caruna.fi.