Increased energy costs and the relationship between energy use and climate change have resulted in focus on energy issues in the Group. It is crucial to Holmen’s long-term profitability to keep energy consumption and costs as low as possible.
Company-generated electricity meets more than one-third of requirements
Holmen wholly or partly owns 21 hydro power stations located on the Umeälven, Faxälven, Gideälven, Iggesundsån, Ljusnan and Motala Ström rivers. Combined with the company’s own electricity production (known as back-pressure power), this means that Holmen is approximately 35–40 per cent self-sufficient in electricity. Production in the hydro power plants in 2012 totalled 1 343 GWh. Holmen is a partner in the BasEl wind power company VindIn. Holmen’s share of the electrical energy produced in 2011 by VindIn from its wind turbines at Skutskär was 10 GWh.
… the rest is purchased
Most of the electricity needed at Holmen’s mills is purchased externally. The Group is consequently one of the largest purchasers of electrical energy in Sweden. To deal with the risks this poses, hedged long-term contracts are signed with the electricity suppliers. Purchases in Sweden are hedged to around 80 per cent for 2013–2015 and to 30 per cent for 2016–2021. Hedging means that Holmen will not be fully affected immediately by changes in electricity prices.
Bioenergy meets half the need for thermal energy
Biofuels, mainly in the form of bark and wood-containing liquors, meet approximately half of Holmen’s thermal energy requirements. Combined with recovered thermal energy, this means that almost two-thirds of the thermal energy needed is produced internally. Remaining quantities of heat are produced at and close to the mills using natural gas and oil, or are purchased from external suppliers.
Iggesund Mill and Hallsta Paper Mill are located close to built-up areas. Surplus heat is delivered to the municipal district-heating networks.
Efforts to improve energy efficiency and reduce the use of fossil fuels are increasing for reasons related to climate change and resources. Holmen is therefore making active efforts to identify and implement energy-saving measures and to increase the level of self-sufficiency in energy. This mainly involves improving efficiency in the use of energy and increasing the proportion of electricity produced by the company, as well as making greater use of waste heat and increasing the proportion of bioenergy. This work has been successful and since 2005 the use of fossil fuels for the Swedish sites has decreased by 55 per cent.
Energy management systems
The Group’s Swedish mills and Holmen Paper Madrid have certified energy management systems. Workington Mill operate in accordance to a certifiable energy management system.
Preparations for wind power
Holmen sees great potential in wind power. Holmen is a major land owner and has the potential to develop its land holdings by establishing wind farms on its own sites with good wind conditions. Hydro and wind power have low operating costs, since they do not require the purchase of fuel, and production is entirely free of carbon dioxide. A possible target for Holmen Energi is to have wind power production of
1 TWh by the year 2020. The major share may come from turbines on Holmen’s own land, which is why wind surveys are being performed at several sites.
In 2012, an environmental permit was obtained to erect 17 wind turbines at Varsvik in the Municipality of Norrtälje, with a potential annual production of around 160 GWh. The project site lies just a couple of kilometres away from Holmen’s paper mill in Hallstavik. At Blodrotberget and Blackfjället in the Municipality of Örnsköldsvik, environmental permits were granted for a total of around 70 wind turbines, with annual production of approximately 450 GWh. However, the reindeer herding community has lodged an appeal against the permits. A decision on the cases is expected in 2013, but extending the power grid will mean that any commencement of operations cannot take place until at least the end of 2015.
Holmen and E.ON signed a contract to jointly develop wind power in the Municipality of Örnsköldsvik at the beginning of 2011. At the end of 2012, environmental permits were obtained for two of the three areas in question. With around 70 turbines spread over three areas, mainly on Holmen’s land, annual production could reach around 475 GWh when all turbines have been built, which is estimated to be the case by 2015.
During autumn 2011, wind surveys began in Östergötland as a result of a cooperation agreement with Statkraft. The project participants agreed to continue taking wind measurements during the winter of 2012/2013. A decision on continued collaboration and project development may be taken around the middle of 2013.
Wind surveys were initiated at the mill in Workington in late 2011/early 2012 in order to investigate the conditions for building three or four wind turbines. In addition to wind surveys, an environmental impact analysis is also ongoing and a final application for an environmental permit is expected to be ready by the end of 2013. The wind turbines could be operational by the beginning of 2015.
Additional wind surveys began in 2012 on Holmen’s land in the Municipality of Skellefteå. Wind assessments and applications will be completed in 2013.
Through its part-ownership of VindIn AB (18 per cent), Holmen was present at the inauguration of the Trattberget wind farm in the Municipality of Örnsköldsvik in October 2012. The wind farm is VindIn’s second after Skutskär. In total there are now 35 turbines supplying electricity at cost price to Holmen and the other stakeholder companies. Once test runs have been completed, the wind farm at Trattberget is expected to generate around 215 GWh per year,
Holmen is gradually increasing the extraction of biofuel from its own forests and has become more active as a buyer and seller on the biofuel market. Holmen’s long-term forest stewardship efforts are increasing the total stock of wood. By taking further measures to stimulate growth, it will therefore eventually be possible to significantly increase the volumes of wood and biofuel extracted.
Work is in progress in the Group to improve the prospects of extracting energy from waste/residues. Various measures are being taken to raise the calorific value of waste.
Holmen is investigating the possibility of harvesting peat on the Group’s land. To gain experience, peat cutting began in the Örnsköldsvik area. A total of 45 GWh was harvested from the area in 2012. In 2013, the harvest is also expected to amount to 45 GWh.