More Flexible Than Ever Gasetti 2/2020

Gasetti 2/2020

Gasum’s magazine for forerunners in the energy sector

The Nordic Energy Market More flexible than ever Gasetti 2/2020

4 Feature Electrifying the future: Expecting ”We are in for a massive a massive surge in demand of electricity surge in demand for

8 Smart energy electricity.” A full-fledged energy company KARI MÄKI, RESEARCH PROFESSOR, VTT 4 10 Gallup Reliability with Guarantees of Origin

12 Point of view Replacing coal with a broad energy mix

16 3 x industry Business in an environmentally friendly way

20 LNG Value chain Smooth bunkering with Gasum´s supply chain

22 News

25 Market analysis

26 Column Gas industry welcomes strategic steps to reduce methane emissions

27 Local Product The Helsinki Distilling Company

Publisher Editor-in-Chief Address source Gasum Anna-Sofia Malmi Gasum Ltd’s customers and PO Box 21 [email protected] stakeholders register FI-02100 Espoo, Finland Editorial Office Cancellation or order Otavamedia OMA Please contact The energy company Gasum is a Nordic Cover [email protected] gas sector and energy market expert. Anna-Kaisa Jormanainen Gasum offers cleaner energy and energy Print run market expert services for industry and 3500 copies Read online: www.gasum.com 4041 0428 for combined heat and power produc- Printed by Twitter: @GasumGlobal tion as well as cleaner fuel solutions for PunaMusta LinkedIn: Gasum road and maritime transport. PHOTO GASUM PHOTO

2 g a s e t t i 2/2020 EDITORIAL

Kimmo Rahkamo

Clean power for clean industry

OUR GENERATION grew up with the concept of having uninterrup- tible power in ever-growing volumes. We as consumers are deeply distracted by a power cut, but for many industries even a very brief power cut may cause huge losses in production. Most of us have probably not really thought about where our power comes from. Of course, we know that there are power plants here and there, but few people actually follow what is happening behind the scenes. Whenever there is discussion regarding further electrifying our so- ciety, someone reminds us that we should be concerned about power production emissions. This is a valid comment, but there are two things to remember. First, a good part of current power production is already carbon neutral such as hydro and nuclear. Second, wind power production is gaining ground and becoming significant. New wind power projects are being developed on a market-driven basis without public subsidies. As production volumes have increased, equipment prices have fallen. Wind power is an excellent example of how public policies were used to help start the business – which can now be expanded without public money. But the wind is not always blowing. What happens on a calm day? We need power then as well. Acquiring wind power from different geographical areas decreases availability risk. It is always windy somewhere. But it is also true that wind power requires other power generation to complement it. Natu- ral gas is a perfect option to fill the gaps in wind power production. Although gas is fossil-based, it reduces carbon emissions by 40% compared with coal. Gasum is committed to cleaner energy. We have expanded our energy portfolio to include power, specifically clean power. Gasum has sourced wind power by using long-term power purchase agreements (PPA) from wind farm developers, which enables us to sell emission-free power to our customers . Here’s wishing all our customers a cleaner-powered future.

The author is responsible for Gasum’s gas and power sales business.

2/2020 g a s e t t i 3 FEATURE

An electric future TEXT Matti Koskinen ILLUSTRATION Anna-Kaisa Jormanainen

The energy system is in for a massive transformation, as societies move toward carbon neutrality. Based on renewable electricity, the future of the Nordic energy market is more complex, flexible, and green.

4 g a s e t t i 2/2020 FEATURE

2/2020 g a s e t t i 5 FEATURE

limate change is a slow-moving FINLAND electric car is hardly carbon neutral if the batteries are crisis, but it is changing the world HAS SET THE filled by a coal-burning power plant. at a fast pace. Within a decade or MOST “We’re a long way from totally renewable energy, so the idea of carbon-neutrality AMBITIOUS but most industries’ carbon neutrality roadmaps de- has gone from a question of “if” EMISSIONS pend on available and affordable clean electricity. This TARGET: to a question of “when.” The EU will lean on massively scaling up wind power, comple- plans to be carbon neutral by TO BECOME mented by hydro, nuclear and to some extent solar 2050, China by 2060. CARBON power, biofuels and so on,” says Mäki. This means massive changes in the energy sector, NEUTRAL BY The market for green energy is already growing fast, which accounts for around 72% of global greenhouse at times outpacing the increase in production capacity. gas emissions, according to the Center for Climate and 2035. The Nordic region is leading the charge in rene Energy Solutions. wables in Europe. Sweden and Finland top the EU As the industry shifts away from fossil fuels, it must charts in share of energy from renewable sources, with find cost-effective and reliable ways to produce cleaner, Denmark coming in fourth. Outside of the EU, Norway more sustainable energy. already produces 98% of its electricity from renewable Thus the current energy transformation is shaped sources, mainly hydropower. by two major trends: electrification and renewables. The market for wind power is also booming, and “Heavy industry, transportation, heating and cool- SWEDEN wind now rivals or even surpasses fossil fuels in af- ing – those are all major consumers of energy and TARGETS fordability, after decades of public subsidies. According that’s where we’re looking to make the biggest cuts in NET-ZERO to Mäki there is massive potential, especially for a carbon emissions. Some of the biggest gains can be EMISSIONS BY sparsely populated country like Finland. There is made by using electricity to power many of these pro- plenty of available land for wind farms from the coastal cesses,” says Research Professor Kari Mäki, who studies 2045. flats to the open ranges of Lapland. A recent survey by smart energy systems at the Finnish state-owned re- Gasum found that potentially up to 30TWhs (terawatt search company VTT. hours) of wind power could be introduced in the cur- Burning coal or oil to power engines, heat houses rent Finnish electricity system. Meanwhile, Norway and fire-up blast furnaces is becoming increasingly un- and Denmark are focusing on offshore wind farms. DENMARK tenable. Switching to natural gas can reduce emissions AIMS TO CUT EMISSIONS BY Ramping up investments Still, further investments are needed to increase the 70% share of wind and other renewables in the Nordic en- (FROM 1990 ergy mix. According to the Oslo-based institute Nordic LEVELS) Energy Research, which works under the auspices of We are in for a massive BY the Nordic Council of Ministers, Nordic countries saw a 9% increase in overall share of renewables in their . surge in demand for 2030 final energy consumption in the decade between 2008 electricity. and 2018. Industries and individual companies can help spur on the necessary investments by purchasing renewable NORWAY energy and partnering up with energy producers, says AIMS TO CUT Ville Pesonen, Head of Energy Market Services, from EMISSIONS BY Gasum in many processes from ship engines to furnaces; bio- – “Companies can commit to buying wind power gas can bring the net emissions to zero. The bigger rev- 50 from a prospective wind farm over a long period of olution, however, is that electric cars, geothermal heat 55% time, for example. As end users of electricity, they have pumps, electric arc furnaces, and a multitude of other (FROM 1990 an important role in funding the transition,” says Peso- technologies are becoming more and more widespread. LEVELS) nen. “We are in for a massive surge in demand for elec- BY When companies seek to achieve their stated emis- tricity,” says Mäki. sion goals, Energy Market Services can help them to . 2030 assess their entire value chain and consider where they

The Nordics lead the way in renewables SOURCE: NORDIC can most efficiently reduce their carbon footprint. The second part of the equation is renewable electricity COUNCIL OF “Energy is a huge part of the equation, as it is neces- generation. Emission reductions from electrification MINISTERS sary for every step in the value chain. Some companies hinge upon how the power is generated. Driving an are fine with buying certified clean energy. Others may

6 g a s e t t i 2/2020 FEATURE

want to take a more active role and support the energy transformation,” explains Pesonen. Renewable energy sources in Flexibility from market integration Rebuilding the energy system around renewable the Nordic region’s sources and electricity requires flexibility from the market. Solar power is notoriously abundant in the summer, when consumption is low, and wind patterns Share of renewable energy sources in hardly obey our fluctuating energy needs. Flexibility the Nordic region’s total energy consumption: can also boost efficiency, using and storing energy increase of when it is cheap and conserving it when momentary demand exceeds supply. Flexibility can be increased by a variety of technolo- 40% 9% gies as well as market innovations. One advantage for in 2018 from 2008 the Nordic region is its highly integrated energy market. Share of renewable energy sources in the EU27 overall: 15% The Nordic countries could facilitate energy transition elsewhere in Europe. Denmark’s percentages of renewable energy in: • gross final energy consumption:35.7 % • transport: 6.6% • electricity: 62.4% • heating and cooling: 46.7%

All of the Nordic countries have deregulated and Finland’s percentage of renewable energy in: opened up their electricity markets and invested in cross-border transfer capacity since the 1990s, and the • gross final energy consumption:41.2 % region now has the most harmonised cross-border • transport: 14.9% power market in the world, encompassing the Nordic • electricity: 36.8% and Baltic countries. • heating and cooling: 54.6% “The value of integrations is there, whether we move towards carbon neutrality or not, strictly in eco- Norway’s percentage of renewable energy in: nomic terms. As we move towards renewable energy, the value of being interconnected increases,” says ana- • gross final energy consumption:72.8 % lyst Kaj Forsberg from the Swedish Energy Markets • transport: 20.0% Inspectorate. • electricity: 106.8% With renewables come greater fluctuations in • heating and cooling: 34.5% power generation and a larger integrated market can help the system to cope with these fluctuations. Re- sources can be utilised much more efficiently when Sweden’s percentage of renewable energy in: they don’t have to be optimised for a number of • gross final energy consumption:54.6 % smaller, more localised markets, says Forsberg. • transport: 29.7% The more large suppliers and sources — from hydro • electricity: 66.2% and wind power to thermal, nuclear and biofuels — en- • heating and cooling: 65.4% ter the market, the more secure and stable it becomes. It also becomes more cost-efficient. According to Forsberg, it makes sense to further SOURCE: NORDIC ENERGY RESEARCH, NORDIC STATISTICS DATABASE harmonise and integrate Nordic and larger European

2/2020 g a s e t t i 7 FEATURE

markets. The Nordics have renewable resources that Where transport and logistics used to be thought of many other countries lack. Norway, for example, is in- as a separate sector from heating and electricity gene creasingly exporting clean hydropower and could po- ration and so on, the future energy system will be in- tentially see an eightfold increase in renewable energy creasingly complicated and interwoven with various exports by 2030, according to some estimates. This feedback loops and synergies. way the Nordic countries could facilitate energy transi- This trend is captured in buzzwords like “sector tion elsewhere in Europe. coupling” and “power-to-x,” which denote a wide range of technologies and market innovations that facilitate Innovative market mechanisms flexibility and make electrification possible beyond the Market integration is useful for introducing flexibility DEMAND FOR confines of a power grid. to the supply side of the equation, but demand-side ELECTRICITY Take the coupling of heating and power, says Kari flexibility is also important, saysFanney Frisbaek, IS EXPECTED Mäki from VTT. District heating plants running on COO of Nordic Energy Research. TO GROW electricity could store energy by heating vast amounts 0.8% of water. They could help soak up the excess when sup- ANNUALLY ply is high, and use less power when there is a short- IN ADVANCED age. ECONOMIES. The first stage of electrifying the transportation system relied on advances in battery technology, which has become significantly more powerful within the last The focus is now on decade or so. Now research is developing novel energy BY conversion technologies that turn electricity into syn- finding market solutions thetic fuels that can be stored and transported outside for flexibility. 2030 the power grid. These fall under the umbrella term RENEWABLE “power-to-x,” where the “x” stands for anything from SOURCES synthetic fuel to heat or something else entirely. “All of Europe is talking about hydrogen fuel now. The idea is to use excess electricity to produce hydrogen, but the technologies are still small-scale and ex- pensive,” says Mäki. “Right now we are looking at market solutions for But the same was true for solar panels and high- providing flexibility,” says Frisbaek. capacity batteries until a few years ago. The science be- This might mean new services, such as “flexibility hind synthetic fuels is familiar, Mäki says, but produc- aggregators” that could act as mediators between sup- tion must be scaled up for them to become cost- pliers and end-users of electricity. effective. An industrial installation or a business might make After all, ultimately the market will decide the fu- ARE a contract, for instance, to allow some of their non ture of our energy system. EXPECTED essential systems to be shut down at certain intervals TO PROVIDE for short periods of time. For example, tempera- NEARLY ture-controlled spaces such as cold storage in super- markets can shut down cooling for a few minutes with 40% no adverse effect on frozen products. Their power sup- OF GLOBAL plier or grid operator, who would in turn benefit from ELECTRICITY the flexibility, would compensate them. SUPPLY. All of Europe is talking “The focus is now on market designs and building business models for flexibility aggregators. Among about hydrogen fuel. others, market operators such as Nordpool are looking into this: How they can design the market for flexibility products,” says Frisbaek.

Future solutions to energy storage: sector coupling and synthetic fuels Another potential source of flexibility is integration SOURCE: IEA between sectors of industry and the processes of producing, transporting, and consumption of energy.

8 g a s e t t i 2/2020 SMART ENERGY

Gasum currently trades in power derivatives and physical electricity and provides customers with:

• Power market portfolio manage- • Demand-side ment and brokering management services for consump- services • 24/7 control room • Balance services in tion optimisation the wholesale services for electricity physical electricity balance manage- market ment and electricity price optimisation

• Expert services for • Guarantees of Origin • Software solutions in • Expert support and emissions trading for electricity the energy market opportunities to participate in wind farm projects

How Gasum transformed into an energy market expert

TEXT Vesa Vainio

The 2018 acquisition of Enegia opened the power market gates for Gasum. The traditional gas company has transformed into a full-fledged energy company assisting its customers with a broad range of energy aspects.

ONE PATH CAN LEAD into another. This market portfolio management, and Peso- with ABO Wind Oy. Built in Kestilä, Fin- is very true of the journey that took nen saw its equally great potential in the land, the wind farm will start generating Gasum into the power market. Head of natural gas market. The aim in both is to power in 2023. The annual output of its Energy Market Services Ville Pesonen promote the interests of the customer in nine turbines will total around 100 giga- says it all boils down to the period before the market. The companies also shared a watt hours (GWh) of electricity. the January 2020 opening up of the great deal of customer base. Pesonen knows that contractual nego- Finnish gas market. “In addition to price, energy involves a tiations for wind power projects are not “We were thinking about what kinds of huge amount of aspects to be monitored simple. Customer interest in wind power services our gas customers would need in from sustainability, access, and demand is high, but the outputs of new wind the future and how we could help them all the way to regulation and weather. Our farms are often too high for individual more in the changing world. The key energy market experts keep a close eye on customers. point was how our customers would man- what’s going on in the world and provide “We want to make it possible for all age their gas portfolios and their risks in clear reports on which our customers can customers to join this process. We’re the open market. When we discovered base their decisions,” says Pesonen, continuously scanning new wind farm that energy expert company Enegia was describing the service. projects. We’ll negotiate and pick those for sale, many pieces slotted nicely into Gasum is now stepping even further that best serve our customers. We assume place,” says Pesonen. beyond power market management ser- the role of our customers’ counterparty, Gasum acquired Enegia in 2018. Ene- vices. In September, Gasum entered into a which makes life easier for them,” says gia had been an active player in power ten-year wind power purchase agreement Pesonen.

2/2020 g a s e t t i 9 GALLUP

New opportunities for responsible choices

TEXT Vesa Vainio

Guarantees of Origin (GOs) are a reliable tool for customers to ensure the power they buy really comes from renewable sources. Widely used for electricity, GOs are becoming available for gas, heating, and cooling too.

emand for renewable energy is surging. energy as well as on GOs,” he explains. Customers want to ensure the energy With regards to the market, one of the key issues is how bio they buy comes from renewable sources. gas GOs relate to the excise duty, an indirect tax. The need has been recognised at the EU “In line with official directives, the starting point here is that level, and Finnish national legislation the GO shows the origin of the gas to the end user but has no based on the Renewable Energy Direc impact on the taxation of the gas used,” says Klimscheffskij. tive is due to enter into force in 2021. Under the Guarantees of Origin (GO) Big customer promises system, GOs can be obtained for electricity, gas, heating, and According to Klimscheffskij, Finland is leading the way in GO cooling produced from renewable energy sources. Senior Con legislation, with the system due to be launched in summer sultant Markus Klimscheffskij from Gaia Consulting has 2021. Gasum Portfolio Manager Mervi Leskinen has monitored studied GOs as regards the various energy forms. the preparations closely and agrees with Klimscheffskij. “GOs provide customers with a participation mechanism in “Progress in the preparations has been made through open the renewable energy market and form part of an efficient discussion in a good spirit of consensus,” says Leskinen. whole. They’ve been used for electricity for 20 years, and now The EU directive allows some scope for interpretation in other energy forms will be put on equal footing,” says national decision-making. Leskinen underlines the importance Klimscheffskij. of legislation for customers. Klimscheffskij says GOs will be equally applicable to gas and “The law provides added credibility and opportunities for heating as to electricity, but there are also some differences. customers to make responsible choices. We then verify the ori Heating and biogas are produced at facilities of very different gin with a certificate. It’s our promise to our customers that sizes and from different energy sources, which needs to be we’ve taken care of it all so that they get green energy,” she ex reflected in the definition of GOs. plains. “It’s important to identify the origin of biogas and district Ville Pesonen, Gasum’s Head of Energy Market Services, heating, as their verification requirements differ from those of gives priority to customer needs. Responsible choices are on the electricity. We should also remember that this is a European rise in the business world, and the debate on practical targets wide system,” says Klimscheffskij. and actions is lively. Many ambitious carbon neutrality pledges have been made. Relationship to excise duty the key issue “There’s been a big change in corporate behavior. Companies For biogas, one of issues emerging is to do with off-grid produc now want to be involved in utilising emission-free energy, but tion. Finnish national preparatory documents recommend the this alone isn’t enough,” says Pesonen. inclusion of off-grid gas production in the GO system. The cru He talks about additionality – renewable energy that truly cial point is to avoid double counting of gas. replaces fossil production. “This is important for the reliability of the system and the “Businesses are keen on entering projects that generate free movement of gas. The Finnish gas market has been opened something new. At Gasum we’re working on such projects relat up, and trading can take place across borders on physical gas ing to wind power, for example,” says Pesonen.

10 g a s e t t i 2/2020 GALLUP

How is sustainability visible in your company’s electricity consumption and sourcing?

MATTI KALERVO, VICE PRESIDENT, ELINA CORPORATE SAARIVUORI, SUSTAINABILITY, SUSTAINABILITY KESKO MANAGER, CORPORATION GASUM Electricity THE K GROUP AIMS to become carbon AT GASUM we use renewable elec- production in neutral by 2025 and to reach zero emis- tricity generated from Nordic hydro- Finland sions from our own operations by 2030. power in all of our operations. Invest- We are cutting emissions by using ing in renewable power is a natural In 2019 for the first time renewable energy, increasing store choice for us, as promoting cleaner renewable fuels produced more district heat than energy efficiency and designing effi- energy solutions is at the core of fossil fuels. cient logistics. All electricity purchased Gasum’s operations. It is easy to by Kesko for K-stores and the Kesko source renewable electricity by ob- Group’s other properties in Finland has taining Guarantees of Origin for elec- been 100% renewable since the begin- tricity, and Gasum Energy Market Electricity was generated ning of 2017. We are also increasing our Services is an expert in this market. (rewenable energy 47%, wind share of renewable electricity by sour- In our Corporate Responsibility power 19%) cing wind power for the next 15 years Program, we have made a commit- from a new wind farm constructed in ment to curbing climate change, 66 TWh Finland. and increasing the efficiency of We have developed a new energy energy use plays a very important recycling model for K-food stores, role in this. We are also committed to which will reduce heat consumption by the Energy Efficiency Agreement for as much as 95% and make our stores Industries and, consequently, to re- almost carbon neutral in terms of ener- ducing our energy consumption by District heating was gy. Motiva awarded our system with the 7.5% by 2025. We are right on track produced Energy Genius of the Year 2019 rec- to reach the target. (renewable energy 42%) ognition. 38 TWh

Total consuption: Industry and construction 46% Households and agriculture 28% Services and public consumption 23% Transmission and distribution losses 3%

2/2020 g a s e t t i 11 12 g a s e t t i 2/2020 POINT OF VIEW

Leading the low-carbon energy way

TEXT Matti Remes PHOTOS Roope Permanto

Helen’s new CEO Juha-Pekka Weckström is steering the energy company through a major switch from coal to renewables, with a strong customer focus.

wned by the City of Helsinki, The Hanasaari power plant will be closed down by energy company Helen has set the end of 2024 while the Salmisaari plant will end the target of making its energy coal use a few years later. production carbon neutral by “A broad energy mix will be required to replace coal, 2035. CEO Juha-Pekka such as pumps to recycle surplus heat, heat storage and Weckström regards the goal biomass use,” according to Weckström. as realistic, as in recent years Helen already boasts a long list of emission-free the company has invested energy investments. One of the most important is the more in emission-free and renewable energy than any heating plant under Helsinki’s Katri Vala Park that other energy company in Finland. produces district heating and cooling from purified “This year alone, our investment decisions promot- wastewater. Most likely the largest of its kind in the ing carbon neutrality have already totalled €400 mil- world, the plant has a production capacity that will lion,” says Weckström. soon further increase. Helen and the City of Helsinki are such big players “We’re now installing the seventh heat pump, which that their choices are of national significance. Weck- will help to replace 10% of the heat production of ström knows that progress made in emission cuts is Salmisaari’s coal-fired plant,” says Weckström. closely monitored. Helen also has a similar heating plant underneath “But at the same time, we must also make sure the the Esplanade Park in the heart of Helsinki. The plant price of energy remains competitive. Helen is an im- produces district heating and cooling out of waste heat portant revenue source for the City, so we’ll be expect- recovered from nearby properties. ed to turn a good profit going forward too,” he says. Other upcoming plants include a seawater heat pump utilizing new technology in Vuosaari, a power Renewables to replace coal plant area where a new bioenergy heating plant is un- Phasing out coal in district heat production is at the der construction. Helen is also looking into recovering core of Helen’s strategy. waste heat from the Kilpilahti industrial area for use in

2/2020 g a s e t t i 13 POINT OF VIEW

NATURAL GAS is likely to play a major role in combined heat and power production for now, says Juha-Pekka Weckström, CEO of energy company Helen.

14 g a s e t t i 2/2020 Helsinki. Located 40 km from Helsinki, Kilpilahti’s facilities include a Neste oil refinery.

Investing in solar and wind power Helen has for long been sourcing hydro and wind power from elsewhere in Finland via its associated A broad energy mix is companies. Wind power output will increase fivefold required to replace coal. by 2022 when the Lakiakangas 3 wind farm is com- pleted in Ostrobothnia near Kristinestad. Solar electricity is produced by Helen at its Kivikko and Suvilahti plants in Helsinki. Solar accounts for a small share of Helen’s total output, but the company is a major player in Finland in solar electricity, and plans “The gas market opening up is a positive thing, but to install more solar capacity in the coming years. we’re keeping an eye on how natural gas taxation Weckström says that Helen’s approaches represent develops,” says Weckström. the circular economy at its best. The company aims to maximize the efficiency of all resource use and energy Telecoms lessons come in handy recycling. Helen’s CEO since April, Weckström has a long track “We’re building carbon neutrality based on the cir- record of working in leading telecoms roles including cular economy. A good example of circularity is the re- as CEO of Digita and TeliaSonera Finland. He believes covery of data centre waste heat for district heating. his previous experience comes in handy in energy Device cooling generates a lot of heat that used to be sector development. frittered away,” he says. Telecoms went through a huge transformation 20 Helen’s City Refinery is working with Lassila & years ago when a switch was made from landlines to Tikanoja and VTT Technical Research Centre of Finland mobile phones and internet services. At the same time, with the aim of processing difficult-to-recycle materials traditional data connection providers turned into pro- into renewable raw materials in a zero-emission process. viders of customer-oriented services. “Energy companies have traditionally focused on Gasum is an important partner for Helen producing energy at power plants and delivering it to Helen’s Vuosaari gas turbine plant is one of the biggest customers. Going forward, the approach has to be natural gas users in Finland, with almost half of the gas reversed and based on the customer perspective,” says used for district heating and the other half for electrici Weckström. ty production at the combined cycle plant. He believes that data utilization, digital solutions, Weckström foresees that gas will retain its major and customer needs are key in the energy sector. Con- role in heat and power production for now. The quick- sumers are increasingly interested in monitoring their est short-term way to cut emissions is increasing the energy consumption and knowing the environmental use of current natural gas-powered plants to replace impact of their choices. the use of coal. “Our services cover almost 1.7 million people in Fin- CO2 emissions from natural gas combustion are land. Our customers have a very broad range of needs almost 40% lower than those from coal. Natural gas is as they include large companies using a lot of energy, also a good fuel with respect to local emissions as its housing companies connected to district heating, and use creates zero particulate emissions and hardly any homes consuming electricity,” says Weckström. sulphur or nitrogen emissions. Weckström points out that Helen actively develops carbon-neutral production forms and solutions for energy optimization. The company’s energy mix to NAME Juha-Pekka Weckström replace coal includes waste and surplus heat, energy POSITION CEO of energy company Helen storage, ground-source heat, and distributed solutions EDUCATION M.Sc.Eng., Technical Physics as well as biomass. BORN Helsinki, 1970 This year the competitiveness of natural gas has LEISURE INTERESTS Playing golf and tennis, hunting, been improved primarily by oversupply on European and spending time at the holiday cabin gas markets.

2/2020 g a s e t t i 15 Promoting responsible energy use

TEXT Vesa Vainio PHOTOS Sami Heiskanen, Joni Autio & Hans van Rhoon

Liquefied biogas and natural gas are green choices for transport companies. Anticipation and risk management are indispensable in the power market.

16 g a s e t t i 2/2020 3 X INDUSTRY

1 Transporting freight with lower emissions

WHAT? Posti Freight Services is one of the three big freight transporters in Finland. It transports freight around the clock with 700 long-haul services where an overnight service plays an important role. Such volumes require a huge number of trucks, which are now being upgraded to lower-emission models. A big step in this direction was the introduction of a fleet of ten trucks running on liquefied biogas (LBG) in late 2020.

HOW? Route planning utilising new technology and competence is one way for Posti Freight Services to cut transport emissions. The same route optimisation is used for the LBG trucks. The aim is to fully utilise the distance covered by a full tank and fill up the vehicle at both ends of the route. The gas filling station network plays a key role in this.

WHY? Posti has been leading the way in corporate responsibility as regards environmental aspects. One of the first steps was the introduction of the Posti Green service ten years ago. Since then, the company has made systematic and long-term efforts and has now set the target of reaching zero emissions in 2030. Freight Services play a key role in this, and therefore determined steps must be taken all the time.

POSTI FREIGHT SERVICES NEXT? Posti’s zero emissions target will be reached • Operates in the competitive freight by taking multiple separate measures, as many little transport market in Finland. drops make a mighty ocean. Every litre of fuel elimi- • Long-haul operations as well as regional and local deliveries, 20 nated from average consumption is a big deal as freight terminals. every unemitted carbon dioxide tonne makes a posi- • Long-haul services cover a journey tive difference. Optimal routes, economical and equalling 4 times around the Earth environmentally-friendly driving styles, and clean each day. renewable fuels comprise a recipe that works. This is • The questions were answered by Antti Wikström, Vice President, supported by High-Capacity Truck (HCT) accesso- Posti Freight Services. ries that provide 30% more transport capacity compared to regular combination vehicles.

2/2020 g a s e t t i 17 2 24/7 monitoring of the energy market

WHAT? Boliden is a Swedish mining and WHY? The power market operates 24/7, metals industry company operating in the which calls for professional competences and BOLIDEN • Boliden AB is a Swedish Nordics. The Boliden smelter in Kokkola, resources. The aim of the partnership is to metals company specialis- Finland, is the second-largest zinc smelter in help Boliden to anticipate and manage risks. ing in exploration, mining, Europe and the biggest industrial employer Gasum monitors the Boliden plants’ power smelting, and metals recy- in Kokkola. The aggregate annual power balance and responds rapidly to changes in cling. Boliden’s main products are zinc and copper, consumption of Boliden production facilities the energy market situation. and it also produces gold, is around 2,000 GWh in Finland and silver, nickel, and lead. around 5,000 GWh Group-wide. NEXT? Environmental aspects and sustain • Boliden’s history dates back ability are at the core of Boliden’s operations. to 1924, which is when HOW? Physical power market services con- The company is cutting its carbon dioxide Europe’s richest gold stitute the core of our cooperation. Gasum’s emissions through actions such as process deposit, Boliden, was discovered in northern Sweden Energy Market Services Control Room mon- electrification and investments in energy near Skellefteå. itors the power market 24/7 and responds efficiency. • These questions were an- rapidly to market changes. Gasum takes care We want to be resource efficient and max- swered by Boliden Energy of Boliden’s day-to-day power trading, moni- imise efficiency and be eco-friendly in the uti- Manager Mika Lehtimäki. tors its power balance and communicates lisation of our raw materials. The role of elec- with its production plants. tricity is growing in efforts to reach environ- The Gasum Control Room communicates mental targets. directly with all of Boliden’s power consumption sites in Finland.

18 g a s e t t i 2/2020 3 X INDUSTRY

1 Moving freight cleaner over land as well as water

WHAT? Samskip is a European multimodal transport company and short-sea operator. Its maritime fleet averages 25 vessels, with ten owned by the company. Two of these are powered by liquefied natural gas (LNG). Operating between Holland and Norway, Samskip Kvitb- jorn and Kvitnos have been refuelled since spring 2020 at Risavika, Norway, under a partnership agreement with Gasum.

HOW? Gasum has an LNG production plant located just 200 metres from the quayside in Risavika. This means fresh and cold LNG can be bunkered swiftly and safely directly to the vessel. A special loading arm and adapter have been developed in cooperation for the purpose. This is why Samskip now bunkers both of its LNG-fuelled vessels regularly at Risavika.

WHY? Responsibility is an extremely important motiva- tion for Samskip’s choices for the future. The decisions we make today must be sustainable today and tomorrow. We receive healthy pressure from our customers, and we are on a common green journey with them. We examine our entire service and supply chain when considering the eco- logical aspects of our operations. Cutting carbon dioxide emissions and supporting sustainable development are our key objectives.

NEXT? We use rail and river barge transport as much as we can. For road transport, our subcontractors use LNG- fuelled trucks and we are keeping a close eye on techno- logical developments in the sector. LNG works well and will be used more as its availability along our transport routes increases. We are particularly interested in how biofuels develop and are more commonly used as fuel alternatives.

SAMSKIP • The company dates back to the 1930s and has been called Samskip since 1991. Originally from Iceland, the company is based in Rotterdam, the Netherlands. • Samskip operates door-to-door logistics serving European maritime and river, as well as rail and road transport needs. • These questions were answered by Samskip Group CEO Kari-Pekka Laaksonen.

2/2020 g a s e t t i 19 LNG VALUE CHAIN

Safety first in the supply chain Gasum operates a complete LNG value chain to serve Nordic markets.

GASUM DELIVERS LIQUEFIED natural gas (LNG) from its production plant in Risavika, Norway, and sourcing partners in Europe. The LNG is transported to terminals in Norway, Sweden, and Finland by chartered vessels. Gasum enables disruption-free deliveries in all weather conditions. From these terminals, gas is delivered to customers either in the liquefied form by truck or vessel, or in the gaseous form via local gas grids to customers located nearby. For maritime customers, Gasum offers truck-to-ship, Bingsa terminal-to-ship, or ship-to-ship bunkering of LNG. Gasum’s extensive fleet of supply vessels provides customers with LNG production plant flexibility by being capable of fuelling vessels of all sizes. A prime example of this was seen in May 2020 when Gasum LNG terminal bunkered Heerema’s Sleipnir, which is the largest semi-submersible crane vessel in the world. “The number of vessels that utilise gas as a fuel in maritime business is growing globally. We are extremely proud of our well-equipped bunker fleet. Our supply certainty is maintained in a systematic and preventive manner and dis- ruptions are extremely rare. The future will likely also see increasing demand for liquefied biogas (LBG),” saysKenneth Olsen, Supply Chain Director at Gasum. Safety and accident prevention are the cornerstones of Gasum’s business. When handling hydrocarbons and building new markets, a flawless safety record is of utmost Imported Risavika importance. This is why safety always comes first in the Volumes company’s operations. Ship-To-Ship Gasum’s operations are strictly regulated by the authorities, and most of the company’s assets are establishments covered by the authorities. This means regular official audits are conducted to ensure high safety standards. Efficiency and reliability in performance and supply form another cornerstone for Gasum. “Our customers’ ability to conduct their business de- pends on our supply certainty. Safety and efficiency are two Ship-To-Ship parameters that go hand-in-hand to create value for both Amsterdam-Rotterdam-Antwerp Gasum and for our customers,” Olsen concludes. (ARA) region

20 g a s e t t i 2/2020 LNG VALUE CHAIN

Our supply chain in numbers

130 people in 4 countries Tornio 7 LNG terminals 5 Bunkering vessels 60 LNG Trailers

Pori

Turku Production

Importing Øra Nynäshamn Storing

Distribution

Lysekil Usage

Ship-To-Ship

2/2020 g a s e t t i 21 NEWS PHOTO GASUM Carbon dioxide could become a new product at biogas plants since it is currently the subject of active research and development.

GROWTH STRATEGY Gasum to sell renewable wind power to its customers

GASUM AND ABO WIND OY have entered put capacity of around 40 megawatts will into a long-term agreement on wind be built in the Kokkoneva, Kestilä, wind

ALEKSI POUTANEN farm output. Under the ten-year Power farm in North Ostrobothnia. Gasum will Purchase Agreement (PPA), Gasum will acquire around 100 GWh of energy a year. begin to sell renewable wind power pro- The wind farm production capacity is duced in North Ostrobothnia starting in enough to generate wind power for e.g. 2023. The PPA will enable Gasum to in- 50,000 one-bedroom apartments. crease the availability of renewable “We’re pleased to enter into a long- Finnish energy and result in the installa- term PPA with ABO Wind Oy. Renewable tion of more wind capacity in Finland. wind power has a key role to play in LNG Domestic wind power will increase meeting growing energy needs and curb- Vegetables Finland’s self-sufficiency in power ing global warming,” says Kimmo Rahka- generation. mo, Vice President, Gas and Power Sales, transported by A 9-turbine wind farm with a total out- Gasum. gas-fueled trucks

AN AGREEMENT signed with logistics company NCS Finland Oy resulted in an increasing share of TRANSPORT EMISSIONS the produce of the Finnish fruit and vegetable wholesaler Sato Cooperation resulted in CO2 tukku being transported by emission reductions of 90% gas-fueled trucks in spring 2020. NCS Finland’s gas trucks run on ORKLA, GASUM AND VOLVO TRUCKS en- cal, operational, and environmental ben- liquefied natural gas (LNG). For tered into cooperation for lower transport efits of using LBG as a fuel. Satotukku they transport produce emissions in Sweden during the summer. “The test has shown that we can from Rotterdam in the Nether- Together with its partners Gasum and reduce carbon dioxide emissions by as lands to Vantaa in Finland. The fuel Volvo trucks, Orkla achieved carbon dioxi- much as 90% while having a very stable choice has a big impact on Sato- de emission reductions of 90% as well as transport solution to operate. Something tukku’s climate friendliness since 25% lower fuel costs. that really supports Orkla’s goal of all as a major importer the company The one-month trial period enabled domestic transport being completely transports huge volumes. Orkla and its transport providers alike to fossil-free by 2025,” says Daniel Kojic, learn more about the potential economi- Transport Manager, Orkla Foods Sweden.

22 g a s e t t i 2/2020 NEWS PHOTO SAMI HEISKANEN Working at Gasum

Tommy Sundin

MY ROLE at Gasum is Sales and Development Manager at DRIVING ON GAS Energy Market Services in Sweden. We are helping our cus- Availability of gas cars tomers managing the risks in the power market in both the financial and the physical markets. Our customers are large improving further industrial companies, energy companies and renewable THE GAS FILLING STATION network has grown energy producers that are exposed to high risks in the power rapidly in recent years and in many areas access to market. It is important to have the right expertise and correct stations is good. Driving on gas is an economical information to lower the risks and make successful hedges in and environmentally responsible choice, as biogas the power market. can help to reduce greenhouse gas emissions by up to 90%. I HAVE been in Gasum for almost an year and I really like the This year, more than 1,000 gas-fueled Škodas sustainability values at Gasum. These values combined with have been registered in Finland and three new dedicated personnel and a strong ownership is what attracted models have been added to the gas-fueled Škoda me to Gasum after working 12 years in renewable fuels. It is in- range. Volkswagen and Audi also both have three teresting and challenging to build up a new business area in a different gas models, and their availability is good new market. in Finland, the Nordics as well as Europe as a whole. ENERGY BUSINESS has always been in my interest. This was Car dealers project even better availability of not so challenging 20 years ago but in recent years the over- gas cars in the future. Sales shot up a few years all energy focus and awareness has rapidly increased both ago, and gas cars are also gradually becoming due to climate change, but also for companies to be able to available in the second-hand market. introduce and produce renewable energy and to hedge low and stable energy prices in a volatile market.

SOME OF the most important future prospects is to introduce and give market access to renewable energy resources such as new wind power, that will increase and, in the future, replace the nuclear power production. This will meet the climate emission targets and Gasum will be one of the key players in the transformation to reach these targets.

Tallinn invest in NAME Tommy Sundin POSITION Sales and Development Manager at 100 buses fueled by Energy Market Services Sweden EDUCATION B.Sc in Energy Engineering at Umeå natural gas. University Sweden HOBBIES Travelling, skiing, running, playing padel, fishing mackerel, cooking FAMILY 2 boys age 8 and 12.

2/2020 g a s e t t i 23 NEWS PHOTO GASUM

LNG Number of gas-fuelled trucks increasing rapidly in the Nordics More and more trucks are now running on liquefied gas. Gas is gaining ground thanks to its low emissions and competitiveness and its improving distribution network.

LIQUEFIED NATURAL GAS (LNG) is be- the next ten years in Sweden. This is operators. In Sweden alone, there are 23 coming an increasingly popular fuel for unique compared with other sustainable HDV gas filling stations, with 17 of them heavy-duty vehicles (HDVs). This is largely fuels,” says Gasum’s Director of Traffic built within the past 18 months. Another due to the EU and national targets set for Mikael Antonsson. 6 new stations are under construction or emissions. Carbon dioxide emissions The transition to cleaner fuels is taking planning. from new HDVs must be cut in the EU by place fast in countries such as Sweden. 15% from the 2019 level by 2025, and the Sweden is committed to reducing its reduction target for 2030 is 30%. carbon dioxide emissions by 70% from the LNG use can help to reduce carbon 2010 level by 2030. The Swedish govern- There is major demand dioxide emissions by more than 20% ment promotes gas-fuelled transport in in Europe for vehicles compared with diesel use. Using lique- many ways, such as providing transport fied biogas (LBG) reduces emissions by companies with support for replacing with an LNG engine. up to 90% compared with diesel. Switch- diesel vehicles with more sustainable ing to LBG does not require any modifi- solutions. cations to gas-fuelled vehicles. “The growth in demand for gas is also According to Antonsson, there is cur- driven by consumers. Companies also rently major demand in Europe for vehi- Fuel price competitive want solutions that cut greenhouse gas cles with an LNG engine, particularly in against diesel emissions today – not in five or ten years Germany, Poland, the Netherlands, Liquefied gas is a cost-effective fuel from now,” Antonsson points out. France, Italy, and Spain. choice, and many countries currently “There was a momentary dip in LNG provide incentives accelerating the Filling station network growing vehicle production during the COVID-19 switch from diesel to gas in heavy-duty Gasum aims to build a network of 50 fill- spring, but data from our manufacturers road transport. ing stations for LNG trucks in the Nordics now shows a bounce back to the “Liquefied biogas is a highly competi- in the next few years. Today there are pre-coronavirus pandemic level,” says An- tive choice, as it will be tax-exempt for around 35 stations run by a variety of tonsson.

24 g a s e t t i 2/2020 MARKET ANALYSIS

TEXT Jouni Liimatta

Power market continues to be impacted by cleaner energy targets

he market for rene- increase procurement of renewable wind customers hedging services also related to wable energy among power in the Nordic countries. natural gas and LNG prices. corporations has been Power prices will continue to be im- Gasum is driven to provide cleaner sparked by corporate pacted by weather also in the future years energy solutions and value adding services social responsibility to come. Record levels of hydro balance, to our customers. We want to help them to objectives, better eco- increasing winds coupled with mild win- succeed in their important clean energy nomics for renewable ters can keep the power prices at low le- targets. Together towards cleaner tomor- technologies and stable and supportive vels for an extended period. On the other row.

Nordic energy policies. The wind power- hand, there can also be occasional cold The writer is Head of Trading at Gasum. based Power Purchase Agreements are spells that change the picture rapidly. It’s nowadays the favored tool for bringing impossible to predict how next season will new renewable energy onto the grid, and turn out to be? This raises the importance Gasum wants to they can help companies hedge against of risk management of power prices. power price swings. Corporations are set- More and more companies are chan- help companies ting clean energy targets and entering the ging the uncertainty into predictability. to succeed in their PPA market, while others are looking at This is not true only regarding power ways to decarbonize their supply chains. prices. We have started to offer our clean energy targets. Wet and warm winter in the Nordics this year led the power prices to extremely low levels and created an unattractive short-term PPA outlook and thus curbed Nordic Corporate PPA volumes in Denmark, Finland, Iceland, Norway and Sweden the demand for Power Purchase Agree- ments in the region. 2000 Also, the COVID-19 had an impact to the projects as bottlenecks across the wind value chain shrunk the pool of eligible 1,881 1500 projects. This was very likely only a tem- porary situation as our recent study showed. The study that was commissio 1000

ned by Finnish Wind Power Association 1,232 showed that Finnish power system could easily take annual wind power production

of up to 25-30 TWh. This finding sup- 764 500 ports the growth of wind power produc 600

tion in Nordics as one of the most impor- 477 397 97 82 tant paths toward achieving cleaner 0 0 0 energy targets. Gasum is a major actor in 0 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 the wind power segment and strives to (Jan–Jun) BLOOMBERGNEF SOURCE:

2/2020 g a s e t t i 25 COLUMN

Juha Ala-Huikku

Rest of Europe should follow in our footsteps

n October, the European Commission presented an EU strategy to reduce methane emissions. The European gas industry welcomed the strategy and expressed their full support for the need to accelerate methane emissions reductions. This is not a new topic for the industry or Gasum, as for years we have been successfully working to reduce methane emissions by im- plementing effective technologies and practices through mandatory and voluntary programmes. Management and reduction of methane emissions across the gas value chain is among the top priorities for the gas industry to contribute to the EU’s climate targets and to ensure that gas will have a role to play for years to For years we have come. The strategy takes a holistic approach, covering not only the been working to energy sector, but also agriculture and waste sectors with the reduce methane aim of having an inclusive approach towards methane and to emissions. better exploit the synergies between various sectors. This is essential, as 53% of methane emissions in the EU come from agriculture, 26% from waste, and 19% from energy. Biogas and biomethane are given a significant role in the strategy – and rightly so! The strategy concretely highlights that biogas and biomethane are key parts of the solution to reduce methane emissions. Especially in the agriculture sector significant emissions can be avoided, when methane- emitting feedstock, such as manure, is brought to the closed and controlled environment of a biogas plant. This enables us to capture and utilise the methane instead of it being naturally released into the atmosphere during manure storage. For years Sweden has been a true front-runner in steering manure and other agri cultural feedstocks into biogas production, and the Finnish government is planning to launch a subsidy-scheme to achieve the same positive results. It will be an absolute pleasure to see the rest of Europe follow in our footsteps and recognise the true potential of biogas and biomethane in achieving the EU’s climate goals.

The writer is Public Affairs Manager at Gasum.

26 g a s e t t i 2/2020 Local product – The Helsinki Distilling Company

TEXT Karoliina Närvänen PHOTO Nora Kolari

Local distillery The first distillery to be Award-winning founded in Helsinki, Finland in company more than 100 years, the Helsinki Distilling Company is The company has been pro- run by two friends, Kai ducing a range of drinks such Kilpinen and Mikko Mykkänen. as award-winning premium gin, the first local aquavit, applejack from Finnish apples, lonkero gin long drink, and rye and single malt whis- Biogas from key since 2014. own waste The company’s biogas is produced in a circular economy from the distillery’s own waste. Lefto- vers from the distillery’s mashing are taken to the Lahti biogas plant for further processing, Keeping its where the plant produces renew- finger on the able, fully domestic biogas, which pulse the Helsinki Distilling Company In the spring, the then buys back. distillery decided to start bottling hand sanitiser to help curb the coronavirus pandemic. Named Helsinki Käsidesi, the hand sanitiser is made from grain-based ethanol and glycerol.

Tours & tastings The distillery also organises guided tastings and tours.

2/2020 g a s e t t i 27 Join the cycle

Together with our partners we are responsibly making biogas available on an industrial level in Nordics. www.gasum.com