Managing Director’s Review 2023

Performance in basic operations remained strong

Our service security in both electricity and heat remained at an excellent level. During the year, we continued to improve and maintain the transfer capacities and reliability of our electricity and heat networks. Customer satisfaction also developed in a positive direction, and particularly our image was rated high by consumer customers in the survey. In the sustainability index included in the customer satisfaction survey, we were rated well above average compared to our control companies.

We continued to invest in our operational capability in various exceptional situations. Particularly during the first winter months of the year, we prepared for a potential electricity shortage by planning and practising and increasing our stakeholders' awareness of the topic. Shortages were ultimately avoided, but our preparedness for such exceptional circumstances is now better than ever.

The energy crisis increased demand for solar panels and hourly priced products

Our customers and stakeholders were interested in energy, particularly electricity prices, contract types and the sufficiency of electricity. We continued to engage in active dialogue with our customers and stakeholders on issues such as the composition of electricity prices and the operation of the electricity market.

The price of electricity fell again from the levels of the energy crisis, but the fluctuating electricity market is here to stay. The crisis increased demand for hourly-priced products, and monitoring energy consumption became routine for our customers. Indeed, energy consumption in Turku Energia Sähköverkot Oy's area kept declining moderately as compared to the previous year. Turku Energia Sähköverkot Oy’s transmission charges continued to be among the lowest in a nationwide comparison. While the energy crisis increased district heating prices, they already began to turn down towards the end of the year.

Interest in small-scale energy production increased among both consumer and corporate customers. The interest of corporate customers in solar energy in particular has remained at a high level, but investments in solar power in detached houses in the Turku Energia Sähköverkot Oy's network area have also increased in the previous years.

Investment decisions to promote carbon neutrality

Here in Turku Energia, the goal-oriented transition towards a carbon-neutral Turku has been at the centre of strategy and measures for the past few decades already. The journey forward requires investments and collaboration with our affiliated companies and customers. The share of renewable energy sources in district heating continued to increase, reaching 87% last year. We also made the decision to invest in an electric boiler which, when completed, will further advance our transition from fossil fuels to renewable and carbon-neutral energy sources.

During the year, we drew up what is already our ninth three-year environment and climate programme. The programme contains close to 30 measures to achieve our carbon neutrality targets and promote a sustainable energy future and biodiversity.

We also prepared for the introduction and impacts of the new regulatory model for electricity networks introduced at the turn of the year. Ensuring the investment capacity of electricity networks has a significant impact on promoting both security of energy supply and the clean transition.

We also started preparing for the reporting requirements of the EU's Corporate Sustainability Reporting Directive by initiating the preparation of a double materiality analysis. Our goal was to identify sustainability themes that are of material importance to our Group. As part of the analysis, we carried out interviews with representatives of our key stakeholders in which we identified the most impactful sustainability topics in our operations from their perspective. As part of the analysis, we also clarified our value chain all the way from energy production to the customer interface.

A vision for a sustainable future

Over the past year, we prepared our new strategy for the next three years. Our key strategic objectives include reforming our operations with emphasis on responsibility, profitable operations, and developing customer satisfaction. To achieve these goals, we will further develop our expertise and operating models, continue to invest in carbon-neutral production, products, and services, ensure the profitability of our business operations, react responsibly to changes, and develop our responsibility covering the entire value chain.

In connection with the strategy update, we also updated our values. Responsibility became one of our three values when we replaced environmental friendliness with a broader perspective on responsibility that also covers the social and economic aspects.

In connection with the strategy work, we also clarified the management principles for our company. We identified four guiding principles, which also formed the four cornerstones of the organisational culture of Turku Energia. Leadership promises support the achievement of our strategic goals, the well-being of our personnel, and a shared organisational culture.

The world around us is ever-changing, and amidst this change, our main task of producing and distributing energy in a reliable, environmentally friendly manner at competitive prices is ever emphasised. Recent years have been demanding, and they have proved that we can move towards our targets also in a turbulent global situation. For this, thanks are particularly due to our skilled and motivated personnel and active stakeholder cooperation.

Timo Honkanen
Managing Director, Turku Energia