In brief

FACTS

Goals and strategies for the Energy Division

Jyväskylä builds the district-heating plant of the future

TABLES

Key figures

GRAPHS

Share of sales

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Top consultant in a sector with great potential

The Energy Division offers technical consulting services for the energy sector. It is active worldwide with a position as a market leader in the Nordic countries, Switzerland and the Baltic countries, and a very strong standing in many areas of expertise, particularly nuclear power, where it is a world leader. The Energy Division accounts for 27 percent of ÅF Group sales.

Energy – significant international operations

The realignment of operations continued in 2008, and the division changed its name from Process to Energy in October in conjunction with the transfer of 177 pulp and paper specialists to the Engineering Division.

The Energy Division offers technical and financial consulting services for the energy sector with the main emphasis on power generation.

Services include everything from advice in connection with business models to implementing investments in power plants and all manner of environmental considerations associated with this.

The division is one of the largest independent international consulting companies in the field of energy. It enjoys a reputation as a world leader in nuclear power, and is one of the leading names in Europe in conventional power generation. In Russia ÅF has established a position as a leading energy consultant, and in South-East Asia and India, where business is expanding rapidly, ÅF has already achieved widespread recognition in certain segments.

One clear factor behind the Energy Division’s success is its track record of implementation processes – the ability to take complex projects all the way from the planning stage through to commissioning and operation.

The Energy Division has approximately 950 employees and is represented in Sweden, Switzerland, Finland, Russia, Estonia, Lithuania, India, Thailand and Vietnam. In addition there are sales and project offices in more than 10 countries. Approximately 90 percent of the division’s assignments are undertaken outside Sweden.

Offer – consulting services for the entire investment cycle

The Energy Division offers a broad spectrum of energy-sector consulting services that includes aspects relating to technology, financing, management and energy consulting. A large portion of assignments are connected to major investment projects. The division offers services throughout the entire life cycle of an investment: analyses and feasibility studies in the initial stages, pre-engineering and engineering once the investment decision has been made, and overall project management during the implementation phase, which can include services such as project management/project control, the basic design of process solutions, procurement negotiations, manufacturing, design and installations inspections, and functionality testing. During the operation of the plant the division offers assistance with various other services, from troubleshooting to maintenance planning.

The division also offers consulting services that are not directly linked to investment projects, such as investigations, environmental reviews, safety studies and capacity-expansion programmes.

Clients – big projects, long-term relationships

Clients are private and publicly owned energy companies, other energy-intensive industries, public institutions and financial institutions. These clients’ investments are often large-scale and extend over many years. The division seeks long-term relationships with a stable circle of clients who generate a large portion of repeat business. The division enjoys a good reputation among its clients, and cooperation is characterised by a sense of partnership, largely thanks to ÅF’s geographical presence and its proximity to its clients.

The division has several hundred clients, of whom the biggest are energy companies and industrial companies with operations in countries where the division has an office. Examples include ATEL, Fortum, GdF-Suez, Eesti Energia, Latvenergo, Lietuvos Elektrinai, Vattenfall and many large Russian energy producers.

2008 – full order books and new assignments

At the start of 2008 the division’s order books were already fuller than they had ever been, and many new assignments were won during the year. Below is a review of just some of the major contracts and other important events.

In January ÅF won a contract to supply technical consulting services in connection with the construction of a new, gas-fired power station in Cikarang, Indonesia. The client is the private power generator PT Cikarang Listrindo, which produces electricity and steam for the Cikarang industrial estate, 30 km east of Jakarta.

In February ÅF won a contract linked to the construction of a new, coal-fired power plant in Vietnam. The plant is being built by the Vietnamese state utility EVN with financing provided by the Japanese Bank of International Cooperation, J-BIC. The assignment will be carried out jointly with the Japanese company J-Power.

In April ÅF was appointed principal technical consultant by the Swiss energy company ATEL for the construction of two 400 MW gas-fuelled power plants in San Severo, Italy, and in Bayet, France. ÅF is responsible for project control and supplier monitoring at both sites.

In August ÅF won an assignment in Estonia to assume responsibility for project control, project engineering and contractor monitoring services for Fortum in connection with the construction of a new biofuel-powered district-heating power plant in the city of Pärnu.

The well-established Lithuanian energy and environmental consulting company TSP Termosistemy Projektai was acquired in 2008. TSP is active mainly in the Lithuanian market but also has assignments in Belarus.

In the fourth quarter ÅF made a major acquisition via a 75 percent stake in the Russian technical consulting company ZAO Lonas Technologija (Lonas) with 250 employees. The Lonas head office is located in St Petersburg and the company also has offices in Yekaterinburg and Kiev. The lion’s share of Lonas’s business comes from within Russia, but in recent years the company has also won contracts in the CIS countries, Kazakhstan and Ukraine. Lonas specialises in the construction of and full-service undertakings in connection with power plants, district-heating plants and turbine plants.

Market and trends

As 2008 began, the market was very strong, with spiralling global energy consumption and the urgent need for an expansion of capacity highlighting the severe shortage of consultants in this area. Towards the end of the year, however, the international financial crisis had already begun to impact on new investment projects, and a number of decisions were shelved or postponed.

In addition to the obvious correlation between growth rates in the world’s economies and the demand for electricity and heating, the energy sector is also affected by demands for energy efficiency, the need for capacity expansion, tougher targets for CO₂ emissions and requirements to switch to renewable sources of energy. All of this means that the division remains confident that energy sector consulting will, in the long run, be a growth area with very good potential.