Annual Report 2010 - Outokumpu

75
Despite of protective actions against price risk, changes in the Nordic Power market still have a significant impact on
Outokumpu. In 2010 the average system price of electricity in Nord Pool was 53 €/MWh. In the beginning and end of the
year cold weather and weakening hydrological situation caused exceptionally high prices on the market. The hydrology
remained weak throughout the year. As well, the low utilization rate of the Swedish nuclear stations pressured prices up
during 2010.
Outokumpu's aim is to purchase low-carbon electricity
Nuclear power
Outokumpu has a 20 MW share in the new Olkiluoto 3 nuclear power project currently under construction in Finland. The
Group's aim is to have access to an additional 150 MW of low-carbon power as one of stakeholders in Fennovoima,
which plans to begin operating a new nuclear power plant in 2020. In 2010, Finland's Parliament granted Fennovoima
permission to build this new power plant as a Decision-in-Principle. The location of the plant will be selected in 2011 and
construction is scheduled to begin in 2012.
Hydropower
Through a long-term leasing agreement, Outokumpu has access to 104 MW of Norwegian hydropower capacity in Rana,
Norway until 2020.
Windpower
Outokumpu is a minority shareholder in Rajakiiri Oy, a company that has been building a wind farm in Tornio. The
winning proposal of Outokumpu's internal EUR 5 million competition in 2008 was to invest in power generation by wind
turbines to reduce CO 2 emissions. The investment was made in Rajakiiri, and the eight shoreline wind generators with
the total capacity of 28.8 MW started electricity production at the end of 2010. Rajakiiri is also drawing up plans for an
offshore wind farm that will have an installed capacity up to 225 MW.
Combined Heat and Power
The Group has a minority stake in a Combined Heat and Power (CHP) plant in Tornio. This plant delivers heat to the
Tornio Works, and a proportion of the fuel used is carbon monoxide gas created as a by-product of the ferrochrome
production process. The CHP plant has also acquired a local heating business in Tornio. This acquisition will lead to
better optimisation of the CHP plant, improvements in energy efficiency and a reduction in the level of CO 2 emissions in
the Tornio-Haparanda region.
Energy and emissions trading
Outokumpu's main production operations in terms of energy consumption and carbon emissions are located in Europe.
More than 90% of Outokumpu's direct emissions fall under the CO 2 Cap and Trade system. The European Emissions
Trading Scheme places a direct financial cost on production emissions and the indirect costs of emissions trading are
reflected through higher electricity prices. These two elements raise Outokumpu's marginal production costs in relation to
our global competitors. Outokumpu emphasises the need for global regulation in efforts to transfer to the low-carbon
society.
The major emissions of greenhouse gases by Group operations are twofold: direct releases of CO 2 from the company's
sites as a result of combusting fossil fuels and process-related emissions from the Outokumpu's steelmaking operations.
Outokumpu's carbon dioxide emissions in 2010 totalled 827 000 tonnes. Outokumpu's emissions trading activities fully
comply with the relevant EU laws and regulations, with agreed procedures and with the Group's trading and risk policies.
Outokumpu Annual Report 2010 – Business – Energy efficiency