Holmen Energi

Market

A total of 145 TWh of electricity was produced in Sweden during 2010, 66 TWh of which came from hydro power. The hydrological balance, which is the quantity of water stored in the Nordic countryside, was at a historically low level at the end of the year. The average spot price in 2010 was SEK 543/MWh, which was 38 per cent higher than in the previous year. Electricity prices rose at the start of the year to exceptionally high levels following the combination of extremely cold temperatures and low production of nuclear power. Very high electricity prices were also noted in November/December. The highest electricity price recorded during the year was SEK 13 757/MWh for one hour and SEK 4 969/MWh for one day. Measured as an average over a month, the highest spot price was SEK 931/MWh in February and the lowest was SEK 383/MWh in May.

Energy supply

Holmen Energi is in charge of supplying the Group’s Swedish mills with electricity. Holmen’s total consumption amounted to 4 625 GWh (4 680) in 2010 – mostly used by its Swedish newsprint mills. The Group’s own production, at its 21 wholly and partly owned hydro power stations together with the  back pressure power production at   Holmen’s large mills, corresponds to around 30 per cent of the Group’s electricity consumption; the remainder is purchased. The Group’s exposure to fuctuations in electricity prices is limited through long-term, fxed-price supply agreements, complemented with financial price hedges (see page 36). Market prices apply to Holmen’s own electricity production. 

Development

NEW SOURCES OF ENERGY.  Holmen Energi is running a series of development projects aimed at establishing new proftable business operations in the area of energy.
Wind power and peat harvesting are two such examples. The aim is to produce 1 TWh of electricity from wind farms in the future, mainly located in forested areas on Holmen’s own land. There are major advantages of building facilities on the company’s land. Selecting the best locations for wind increases the proftability of the projects and reduces the risk, because Holmen itself consumes a large amount of electricity. Land leased for wind power generates revenue. Forestry operations within wind farms will be able to continue more or less as normal. Wind power surveys have been conducted on Holmen’s land in areas around Örnsköldsvik and near the mill in Hallstavik since 2009. The results of the surveys are positive and the work is now continuing with applications for the necessary permits. Energy peat has been produced on Holmen’s land at Stormyran north of Örnsköldsvik since summer 2009. In 2010, volumes were more than doubled. The volume of peat produces 47 GWh of energy, which is an   addition that corresponds to the annual energy needs of more than 1 800 detached houses. Stormyran’s annual future production is estimated at 70 GWh. Peat consists of plant material that, owing to a lack of oxygen, has only partly decomposed into bogs and fens. The incomplete breakdown means that much of the energy content of the biological material is retained, enabling peat to be used as fuel. Peat harvesting provides a way of utilising several of the value-creating resources that the Group has at its disposal. Holmen Biorefnery Development Centre was established in 2009 with the task of running long-term development work. The possibility of extracting bioenergy and green vehicle fuels in biorefneries linked to the Group’s factories is being studied, as is the possibility of manufacturing chemicals and brand new types of fbre and lignin products. A survey is already under way at Hallsta Paper Mill, looking into a possible facility for production of biogas from wastewater. After being refined, the biogas can be sold as vehicle fuel

.
ENERGY COOPERATION. A number of electricity-intensive companies in primary industries, including Holmen, set up VindIn AB in 2006, a company that develops, constructs and operates wind turbines in Sweden. VindIn’s goal is to generate 1 TWh of electricity each year. The frst wind farm is located at Skutskär and has been in use since October 2009. Its annual production totals 28 GWh, of which Holmen’s proportion comprises 4 GWh. An additional wind farm, Trattberget, is under construction and will produce around 180 GWh per year, of which Holmen is estimated to receive about 30 GWh. Permit applications for more wind farms have been submitted. In collaboration with four other companies, Holmen has founded a company called Industrikraft i Sverige AB to secure fossil-free baseload power for the future. To this end, a letter of intent was signed with the power utility Vattenfall during autumn 2009.

ENERGY SAVINGS.  Responsibility for improving energy effciency is decentralised to the mills, but coordinated centrally. The new recovery boiler being constructed at 
Iggesund Mill is the key to the mill’s long-term plan to be self-suffcient in electricity and to be 100 per cent run on biofuel. At Braviken, co-location of the existing paper mill and the new sawmill will produce signifcant benefts. Existing infrastructure can be used jointly and opportunities will be created for effcient energy solutions. An old oil-fred boiler is being replaced with a new electric boiler at Hallsta Paper Mill. This will radically reduce dependency on oil and improve the effciency of the way in which energy consumption is controlled. The pulp line at Workington Mill is being rebuilt, which among other things will reduce energy consumption.