Finland. Oulun Energia Oy

The loan has been provided to finance the construction of a new combined heat and power (CHP) plant in Oulu, Finland.

The new CHP plant will replace an old boiler (Toppila 1) which has been in use since 1977 and currently produces one third of the district heating for the Oulu region.

The new unit will use a greater share of biofuels, with the fuel mix consisting of approximately 70% wood biomass, 15% peat and 15% recycled fuel. This will help to reduce the use of peat and cut emissions into the air whilst maintaining similar levels of heat and power generation.

The total project cost is approximately EUR 200 million.The construction work has started in June this year, and the new CHP plant will begin operating by the end of 2020.

Oulu Energy is a limited-liability company owned by the City of Oulu. It is the largest energy group in Northern Finland, operating in the production of fuels; the production, sale and distribution of electricity and district heat; as well as various services, such as intelligent energy services, power grid services, contracting and maintenance. The company has a strategic target of becoming carbon-neutral by 2050.

Productivity:
Investing in the company’s production assets will improve  productivity through reductions in operating costs in heat and power production.

Further, it is estimated that the utilization of wood biomass will increase by 50% upstream of the process, adding value to the local wood processing and entire forestry chain.

Environment:
The new 215 MW boiler will replace an old 267 MW boiler that does not comply with the environmental requirements of the EU’s Industrial Emissions Directive and has a permit to operate only until 2020. After the construction, the new boiler will use a greater share of biofuels (70% wood biomass, 15% peat and 15% recycled fuel), thus reducing the share of peat in energy generation.

The new plant will be equipped with a flue gas condenser for heat recovery (55 MW), and the overall efficiency of energy generation will increase to over 95%.

Due to the change in the fuel mix and better flue gas treatment, the project is estimated to reduce the total CO₂ emissions by approximately 320,000 tonnes a year, emissions of sulphur dioxide and particulate matter by around 50–60%, and emissions of nitrogen oxide by approximately 15%.

The contracts for wood biomass supply include the recommendation that the wood for energy generation should be sourced from forests that are certified as being managed sustainably.

The flue gas treatment of the new boiler complies with the new requirements of the best available techniques for large combustion plants, as required by the Finnish Environmental Protection Act. The dispersion of air emissions are well below the threshold values of the ambient air quality standards, and the assessed noise impact of the project complies with the ambient noise regulation.

The cooling water and the condensate treatment reject will be discharged into the Oulujoki river. The heat and emission loads on the river are estimated to decrease due to the project, and the impact on the water quality of the river and its estuary at the Bothnian Bay is assessed to be minor.

Appropriate environmental, health and safety management systems and procedures are in place for the construction and operation phases.