Energy costs and the relationship between energy use and climate change have resulted in a 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 equals half of consumption
Holmen wholly or partly owns 21 hydro power stations located on the Umeälven, Faxälven, Gideälven, Iggesundsån, Ljusnan and Motala Ström rivers. Production at the hydro power plants in 2019 totalled 1 033 GWh. Combined with wind power electricity production and the company's own electricity production (known as back-pressure power), this means that the production 2019 corresponded to 48 per cent of the electricity demand.
The wind farm in Varsvik, in the Municipality of Norrtälje, is the first on the Group's own land and also the largest wind farm in the county of Stockholm. Holmen's share of the electrical energy produced in 2019 was 76 GWh.
Holmen is a partner in the BasEl wind power company VindIn. Holmen's share of the electrical energy produced in 2018 by VindIn from its wind turbines was 28 GWh.
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 are hedged to 80 per cent for 2020 and to 65 per cent for 2021. Hedging means that Holmen will not be fully affected immediately by changes in electricity prices.
Bioenergy meets 75 per cent of the need for thermal energy
Biofuels, mainly in the form of bark and wood-containing liquors, meets 75 per cent of Holmen's thermal energy requirements. Recovered thermal energy accounts for just under 20 per cent of the thermal energy needed. Remaining quantities of heat are produced primarily at and close to the mills using natural gas, oil and LPG.
Iggesund Mill and Hallsta Paper Mill are located close to built-up areas. Surplus heat is delivered to the municipal district-heating networks. Surplus electricity from the mill in Workington is sold to the national grid.
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.
Energy management systems
A certified energy management system is in place at all the plants in the Group except for Linghem Sawmill. Acquired in 2017, the mill is set to become certified and then it will be included in Holmen Timber’s certificates.
Hydro and Wind power
Hydro and wind power have low operating costs, since they do not require the purchase of fuel, and production is free of carbon dioxide.
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. Technical advances and a new generation of more efficient wind turbines, combined with slightly higher electricity prices, create opportunities for the future establishment of wind power on the Group's land.
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Holmen extracts 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 increase the volumes of wood and biofuel extracted.
Work is in progress in the Group to improve the prospects for extracting energy from by-products/waste. Various measures are being taken to raise the calorific value of the materials.
The staff unit Holmen Development initiates research into innovation and product development. Its work includes investigating how waste and by-products from the mills can be further utilized.
Holmen’s peat field outside Örnsköldsvik was taken into use in 2009 and is harvested annually for energy purposes. Production amounted to 70 GWh in 2019.