“The third quarter is typically a seasonally low quarter with lower power prices and volumes. In July and August, Nordic spot prices were pressured by high precipitation, good nuclear availability and increasing wind and solar output. In September, drier conditions and nuclear outages due to both planned maintenance and unexpected technical issues increased the prices. In Finland, the price coupled strongly with Estonia on low wind days especially after the Estlink 2 transmission line returned to operation in early September after a long break. Overall, Nordic energy demand has recovered to pre-crisis levels and non-industrial demand is strong throughout the Nordics; Finnish and Swedish industrial demand, however, is still lagging.
The lower spot prices affected especially the Generation segment’s result, but with our versatile and competitive CO2-free fleet, successful hedging and a solid optimisation premium our achieved power price reached a good level, and we recorded a resilient result. Compared to the third quarter of 2023, the main reasons for the Generation segment’s lower result were the lower achieved power price and lower hydro volumes, partly offset by the improved result in the renewables and decarbonisation business. The result decreased in the Consumer Solutions segment and improved in the Other Operations segment.
The strategic review of our Circular Solutions business took a next step during the third quarter. In July, we signed an agreement to sell our recycling and waste business to Summa Equity for approximately EUR 800 million. Based on the balance sheet available at signing, we would record a tax-exempt capital gain of approximately EUR 110 million. However, the final capital gain will depend on the balance sheet value at closing, expected to take place in the fourth quarter. In September, we announced that we had signed an agreement to sell our ownership in Chempolis Oy, including all Fortum’s biobased solutions businesses, and the shares in the holding company of Assam Bio Ethanol Pvt Ltd in India to AM Green Technology & Solutions B.V. The transaction will not have any material financial impact on Fortum Group’s result.
We continue our strategy implementation. On our strategic priority to deliver reliable and clean energy, we are focused on optimising and strengthening our core operations for power generation. At the Loviisa nuclear power plant, we reached an important milestone in securing a reliable Western alternative for fuel supply by loading the first batch of Westinghouse fuel in August. The lifetime extension of our Loviisa nuclear power plant is also progressing well with, e.g., the automation upgrade of the turbine protection and control systems of both power plant units. We are very happy to see that there is demand for long Power Purchase Agreements (PPAs) also for nuclear power in other parts of the world. The Loviisa lifetime extension provides a 1,000-MW extension for 22 years until 2050, and we are well positioned to offer reliable CO2-free base load power to our industrial customers. In Sweden, Fortum, together with its co-owned nuclear plants’ other owners, has decided to investigate extending the operating lifetime of also the Oskarshamn and Forsmark plants to 80 years.
On our strategic priority to drive decarbonisation of industries we continued the development of several potential sites across Finland that can be offered to our customers for data centre or industrial use. One of these is a site in Rauma, where we are developing a site for a sustainable synthetic aviation fuel (eSAF) plant together with Norsk e-Fuel and Port of Rauma.
Within the scope of our strategic priority to transform and develop, we continued our efforts for the efficiency improvement programme with the target to gradually lower annual fixed costs by EUR 100 million (excluding inflation) by the end of 2025 with a full run-rate from the beginning of 2026. Fortum expects to reduce its recurring fixed cost base by more than EUR 50 million by the end of 2024.
In September, the new EU College of Commissioners was introduced with a view to formally take the office at the end of the year. Their mission letters emphasise industrial competitiveness alongside commitment to climate targets and energy affordability. Energy plays a significant role in these, and Fortum will actively engage in influencing these initiatives to ensure they support a competitive and sustainable future. Increased clean power supply through ambitious deployment of all low-carbon electricity sources is a necessity for competitive decarbonisation of Europe’s industries."