Finland. Kuurnan Voima Oy
|Date of agreement:||23 Nov 2020|
|Customer:||Kuurnan Voima Oy|
|Amount in EUR:||EUR 10 million|
|NACE sector / loan type:||Production and distribution of electricity|
Financing from NIB Environmental Bond proceeds
NEB-eligible share: 100%
NEB category: Renewable energy generation
Amount disbursed: EUR 10 million
Note: For loans in other currencies than EUR, the equivalent in EUR is based on the exchange rate effective for the disbursement. Read more about the NIB Environmental Bonds
The EUR 10 million loan has been provided for the refurbishment of a hydropower plant and for building of a new small-scale hydropower plant in Pielisjoki River in North Karelia, Finland.
The existing power plant has two Kaplan turbines and a production capacity of 18MW (2 x 9MW) and an average annual energy generation of 120 GWh. The loan will finance the refurbishment of these turbines, the generator and the automation of the old plant. In addition, both the dam structure and the waterways will be refurbished.
The total investment amounts to EUR 20 million and also includes the construction of an additional small-scale hydropower plant with two 1 MW turbines in the Kuurna spillover channel.
A spawning area for endangered lake salmon was established in Pielisjoki River’s Laurinvirta spillover channel in 2019. The cost of the Laurinvirta project amounted to EUR 4.5 million and reduced the productivity of the hydropower plant significantly. The installation of the additional small-scale hydropower plant in the spillover channel will both secure the water flow for the spawning area and harness energy from the spillover water flow and, thus, increase the overall productivity of Kuurna.
Founded in 1958, Kuurnan Voima Oy is owned by Pohjois-Karjalan Sähkö Oy (89%) and City of Joensuu (11%).
Fulfilment of NIB's mandate
The investment will significantly increase the efficiency and the capacity of the hydropower station. The power station is small and, unlike many other hydropower stations, it has limited ability to adjust production levels. This follows from that an upstream power station of UPM regulates the flow to the station. Thus, the company cannot fully capitalize on the higher prices during peak demand hours.
The power station is less important than other hydro power stations of similar production capacity, because it has limited balancing power capabilities. Therefore, the wider impacts relate only to general infrastructure improvement indicators.
Ex-ante impact indicators productivity:
• Investment cost: EUR 20 million
• Production increase pa: 18 GWh
• Capacity increase: 2 MW
Refurbishment of the Kuurna hydropower plant will include upgrading of the turbines and electric systems without structural changes to the waterways. The new equipment will increase the efficiency and flexibility of the plant and increase the annual production by approximately 18 GWh, resulting in approximately 5,000 tons of CO2 emission avoided annually.
The refurbishment also includes installation of an oil-free impeller, reduced oil content in control systems, and improved oil abatement structures in the cooling and, therefore, reduces the risk of accidental oil leakages to the river.
Furthermore, two additional 1 MW turbines will be installed in the spillover channel (Laurinvirta) to capture energy from the spillover water flow that has been increased due to a large spawning area for the endangered landlocked salmon that has been established in 2019.
Ex-ante impact indicators environment:
• Added renewable energy generation is 18 GWh and will result in approximately 5,000 tons of CO2 emission avoided annually.
• Reduced oil content in plant operations.
Both the refurbishment of the Kuurna hydropower plant and the installation of small-scale turbines in the Laurivirta spillover channel can be completed without structural changes to the waterways and, thus, have limited impact on the environment.
In addition, Kuurnan Voima has participated in improving the sustainability of the area via the Laurinvirta fish spawning area project. The aim of the project is to promote the natural reproduction cycle of landlocked freshwater salmon, which is endangered and has been unable to reproduce naturally for 50 years. A dedicated five-hectare area in the Pielisjoki River has been reserved exclusively for spawning. Kuurnan Voima has committed to keep the water level high enough for the salmon by ensuring continuous water flow in the spillover channel.
A submerged weir is planned for the mid-section of the floodway, as well as a network of channels and bars to mitigate the effects of fluctuating water levels on the fish habitat. Computer-based modelling was used to design the area so that it corresponds to the varying needs of eggs and parr (young salmon) as well as varying requirements in the summer and winter.
The Laurinvirta project has been completed in collaboration between Kuurnan Voima (Laurinvirta), Natural Resources Institute, North Karelia Centre for Economic Development, Transport and the Environment, Regional Council of North Karelia, and the Ministry of Agriculture and Forestry.