A quick tour of the major European papermakers reveals a whole host of plans to slash energy costs across the industry

Finding the energy to save more money

Powering a modern pulp and paper mill is no mean feat. At a typical modern kraft pulp mill, steam usage can reach up to 5,700 kg/tonne, while power needs often soar to 750 kWh/tonne. Taking these figures into account - and the associated costs - it is hardly surprising that the major European pulp and papermakers are having another look at their energy supplies. What may be harder to understand is that the companies are taking totally different approaches in order to cut down on energy costs and boost their environmental performances.

Zooming in on the energy projects underway at Stora Enso, UPM-Kymmene, Sappi and Myllykoski, it becomes increasingly obvious that European companies are going their separate ways as far as energy issues are concerned. From biomass to combined heat and power (CHP), via water cooling or a complete asset sale, the paper industry is exploring every possible avenue in the energy field.

Construction of the biomass power plant gets underway at Myllykoski

Combined benefits

One of the biggest energy projects to be announced this year concerns a combined heat and power (CHP) plant at Sappi Fine Paper Europe's Blackburn mill in the UK. The 60 MW plant will be built and operated by Ahlstom Power, with Scottish Power as the owners. Work on the £40 million ($60 million) gas-fired facility started in August this year at the Blackburn mill, while startup is penciled in for October 2001. The unit will provide the mill with 10 MW/hr of electricity and 30 tonnes/hr of steam, with surplus electricity being exported to the national electricity grid.

There were two main reasons behind the decision to go ahead with the new CHP plant, according to Doeko Bosscher, director of technology at Sappi Fine Paper. "The main reasons were the cost savings and the environmental impact. The mill's emissions will be significantly improved with the new plant as we were previously using oil-fired equipment," he explains.

On top of that, Sappi is set to pocket around £1 million/yr in energy savings. Bosscher adds that another important driver behind the investment was the UK's Climate Change Levy, which is due to come into effect next April. As part of the Kyoto agreement on the environment, the UK government has pledged to cut its greenhouse gas emissions by 20% by 2010, based on 1990 levels. The Climate Change Levy sets challenging targets for energy reduction and would have cost the UK's paper industry between £60-100 million in its non-rebated form. But as a highly energy intensive industry, the UK Paper Federation has managed to negotiate some breaks with the government.

By offering to cut the industry's energy consumption by 40% by 2012, the federation has achieved 80% discounts on the levy for companies that are willing to meet the new targets. Bryan Bateman, director of special projects at the Paper Federation, is confident that these agreements will be finalized in the UK in November, but the sticking point may be in the European Commission. "Our largest problem is that the drafts are subject to clearance by the Commission competition authorities because the UK government introduced the Climate Change Levy as a tax. The present signs are that the Commission is coming close to our way of thinking, though."

On top of the discounts, there will be conditional exemptions for users of CHP plants, which made this option very interesting for Sappi. And Bateman points out that the South African papermaker is not the only company in the UK to take up the CHP challenge. "Bridgewater recently started up a new CHP plant and Shotton Paper is installing one of the largest in the UK," he says.

Burning up in Finland

Meanwhile, other papermakers have opted to go down the biomass path. At Kuusankoski in Finland, UPM-Kymmene plans to build a power plant that will be used to generate electricity and heating for the local district. The plant will be fueled by bark, sludge and sawdust obtained from the mills at the site and sources from other forest industry processes in the region. Kymin Voima is to build the plant. Kymin Voima is owned by UPM-Kymmene's associate company, Pohjolan Voima.

The plant will produce a total of 76 MW back pressure electricity for Kymi Paper. It will also generate 125 MW of process heat and 15 MW of district heat for Kymi Paper and 40 MW of district heat for the towns of Kuusankoski and Kouvola. An environmental permit was granted in early August this year and the plant is expected to launch into action in the third quarter of 2002.

Myllykoski has also started work on a biomass project. The foundation stone for an 80 MW power plant was laid in February this year. The plant will have one fluidized bed boiler and two natural gas standby boilers. The new unit will signal the end of the use of coal at the mill. Vattenfall is building the plant, with Foster Wheeler as the main equipment supplier and CTS Engineering the main engineering consultant.

Stora Enso tries out techniques

Stora Enso also hit the headlines this year as the group unveiled plans to sell off its power assets in Finland and Sweden. In the middle of 2000, the company sealed a SEK 15.58 billion ($1.7 billion) deal with Fortum and Birka Nat, which is jointly owned by Fortum and the Stockholm city authorities.

For the next couple of years, Stora Enso will continue to source its electricity in much the same way as in the past, though. "We have a strong cooperation with Fortum," Ingvar Petersson, senior executive vice president, explains.

The main reason behind the sale was financial as the deal allowed Stora Enso to release the capital that partly funded its Consoldiated Papers deal. But the timing of the move was also important. As Petersson points out, "Deregulation is underway in the energy market and barriers to competition are being lifted. As a consequence, power companies are growing and production is becoming more concentrated and more international."

Petersson sees deregulation as a positive trend in the energy markets, especially in terms of pricing and quality. As he says, "With competition, energy market pricing will become more coherent."

Stora Enso's moves to get rid of its power supplies certainly grabbed a fair share of the industry's headlines this year. This may have been because of the high monetary stakes involved, but the interest was also due to the novelty factor. As Petersson comments, "When we announced our decision last August it received a very good reception in the market and in the public, although it may have come as a surprise to many. I believe that many others [in the paper industry] will do the same as deregulation advances."

There are plans afoot to sell the company's 16.5% stake in Pohjolan Voima as well, but for the moment nothing has been decided, according to Petersson. Even if the power plants are being axed from the group's portfolio, Stora Enso is still investing in some very interesting energy-saving techniques at its mills. By October this year for example, Stora Enso's mill in Varkaus, Finland, was scheduled to be able to extract aluminum from liquid packaging cartons separately from polyethythene. The result is that even long-life cartons will be completely recyclable. But from an energy point of view, this development also means that the mill can potentially become self-sufficient.

The mill is in the process of constructing a gasification system that will convert polyethylene to a gas, leaving the aluminum uncontaminated and saleable. The polyethylene gas can then be burned to create energy. Previously, attempts to burn the mixture of polyethylene and aluminum in the boiler have been hampered as the aluminum has blocked the boiler.

The gasification plant will produce 40 MW of heat and 165 GWh/yr of energy. Up to 2,000 tonnes/yr of aluminum can be recovered with the system. The aluminum will be melted down and molded into blocks, which will be used by a Swedish manufacturer of aluminum foil.

Power to the papermakers

Whatever option the papermakers choose to adopt for their energy generation, it is clear that the industry is keen to look into all the alternatives on offer. Some are spurred on by the cost savings that are possible by using new techniques, while other companies are concerned with improving the environmental impact of their mills.

The bottom line is that the industry is always on the look-out for ways of cutting costs, while at the same time maintaining quality and keeping its operations on the green track. If they can find an energy option will which allow them to achieve all three, then you can be sure that they will give it a try.

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