Fingrid’s reserve power plants are subject to an environmental permit and covered by the EU’s emissions trading scheme. Fingrid has not been granted free-of-charge emission rights for the emissions trade period 2013–2020. Emission rights purchased in 2017 amounted to 4,150 units (tCO2). Emissions trading had minor financial significance for Fingrid. CO2 emissions included in emissions trading totalled 5,817 tonnes in 2017 (10,335).
Emission rights acquired free of charge are recognised in intangible assets at their nominal value, and purchased emission rights at their acquisition cost. A liability is recognised for emission rights to be returned. If the Group has sufficient emission rights to cover the return obligations, the liability is recognised at the carrying amount corresponding to the emission rights in question. If there are not sufficient emission rights to cover the return obligations, the liability is recognised at the market value of the emission rights in question. No depreciation is recognised on emission rights. They are derecognised in the balance sheet at the time of transfer when the actual emissions have been ascertained. The expense resulting from the liability is recognised in the income statement under the expense item ‘Materials and services’. Capital gains from emissions rights are recognised under other operating income.
|25. PROVISIONS, € 1,000||2017||2016|
|Provisions for creosote-impregnated towers 1 Jan||1,481||1,668|
|Provisions 31 Dec||1,474||1,481|
A provision is recorded when the Group has a legal or factual obligation based on an earlier event and it is likely that fulfilling the obligation will require a payment, and the amount of the obligation can be estimated reliably.
The provisions are valued at the present value of the costs required to cover the obligation. The discounting factor used in calculating the present value is chosen so that it reflects the market view of the time value of money at the assessment date and the risks pertaining to the obligation.
|26. COMMITMENTS AND CONTINGENT LIABILITIES, €1,000||2017||2016|
|Pledge covering property lease agreements||9|
|Pledge covering customs credit account||200||280|
|Pledge covering excise duty||280|
|Other financial commitments|
|Rent security deposit, guarantee||38||38|
|Credit facility commitment fee and commitment fee:|
|Commitment fee for the next year||400||395|
|Commitment fee for subsequent years||1,154||1,154|
|Unrecognised investment commitments||93,991||84,572|
|The investment commitments consist of agreements signed by the company to carry out grid construction projects.|
|Payment obligations from right-of-use agreements for reserve power plants:|
|In one year||10,769||7,601|
|In more than one year and less than five years||34,124||36,477|
|In more than five years||27,888||36,201|
Under its system responsibility, Fingrid is also obligated to maintain a rapid response disturbance reserve to prepare for disruptions to the power system. In order to ensure the availability of this disturbance reserve, Fingrid has, in addition to its reserve power plant capacity, acquired power plant capacity suited to this purpose by long-term Right-of-use agreements.
LEGAL PROCEEDINGS AND PROCEEDIGNS BY AUTHORITIES
A lawsuit was initiated against Fingrid in December 2016, demanding non-specified liquidated damages due to an alleged breach of contract. The legal proceedings ended with the district court issuing an interlocutory judgement in December 2017, according to which Fingrid had not been proven to have committed a contractual breach.
Fingrid has appealed to the Market Court against the decision issued by the Energy Authority on 2 January 2017 to the extent where the Energy Authority required Fingrid to submit the terms and conditions concerning the balancing power agreements and the grounds for the determination of fees for approval by the Energy Authority. According to Fingrid, under the legislation in force at the time the decision was issued, it was not required to submit the terms and conditions related to the procurement of balancing power beforehand to the authority for approval. The matter is still before the Market Court. The legal proceedings do not have a substantial impact on the company’s financial result or financial position.
EVENTS AFTER THE CLOSING DATE
The Group management is not aware of such significant events after the closing date that would affect the financial statements.
GROUP’S CONTACT INFORMATION AND APPROVAL OF THE FINANCIAL STATEMENTS
Fingrid Oyj is a Finnish public limited liability company incorporated under the Finnish Companies Act. Fingrid’s consolidated financial statements have been drawn up in accordance with the International Financial Reporting Standards (IFRS) as adopted by the EU. Fingrid’s registered office is in Helsinki at the address P.O. Box 530 (Läkkisepäntie 21, 00620, Helsinki), 00101 Helsinki.
A copy of the consolidated financial statements is available on the website fingrid.fi or at Fingrid Oyj's head office.
The amounts in the financial statements are expressed in thousands of euros and are based on the original acquisition costs, unless otherwise stated in the accounting principles or notes.
Fingrid Oyj’s Board of Directors has accepted the publication of these financial statements in its meeting on 1 March 2018. In accordance with the Finnish Companies Act, the shareholders have the opportunity to adopt or reject the financial statements in the shareholders’ meeting held after their publication. The shareholders’ meeting can also amend the financial statements.