Fortum Corp. is building a new natural gas-fired power plant near the Finnish capital, in an investment worth 220 million EUR(US$300 million).
The plant, expected to be online by 2009, will provide district heating and electricity to houses in Espoo. It will have a power capacity of 234 megawatts and a district heating capacity of 214 megawatts.
Carbon dioxide emissions will be cut by more than 10 percent as the plant will reduce the amount of coal and oil used in regional heating, Fortum said.
"Combined heat and power production is an efficient and environmentally benign way to produce energy," Fortum spokesman Timo Karttinen said.
Last month, Fortum announced plans to construct a plant that uses biofuels in southern Finland and said it will further increase the production of environmentally friendly electricity.
Fortum, based in Espoo, is the second-largest power company in the Nordic region. It employs 9,000 people and is 51 percent owned by the Finnish government.