1 Newsletter 1/2013

Climate and Energy Programme of 2020

Locally – Renewably – Efficiently

This is the first Climate and Energy The Climate and Energy Programme the situation, a questionnaire on Programme of North Karelia news- of North Karelia 2020 was adopt- the Programme was sent to mem- letter. The aim is to publish a news- ed in August 2011. The Programme bers of the steering committee and letter at least twice a year. It will sets out targets and measures for work groups, as well as to several contain details on current meas- energy production and consump- other key actors in North Karelia in- ures under the Programme and tion in connection with communi- volved in the Programme’s imple- help to implement and monitor it. ty structure, agriculture and for- mentation. The results of the sur- estry. Because it has now been 18 vey will be used to monitor the months since the Programme was Programme, to assess the effective- adopted, the time has come to ness of measures and to plan the start monitoring the Programme’s allocation of funding during the implementation in a more system- forthcoming programming period. atic manner. The Regional Council of North Karelia is the body that The targets set for the Climate

Paikallisesti – Uusiutuvasti – coordinates the monitoring of the and Energy Programme need to Vietävän tehokkaasti Climate and Energy Programme. be achieved. This will require a ro- Pohjois-Karjalan ilmasto- ja energiaohjelma 2020 bust approach to monitoring the To monitor the Programme’s imple- Programme and, above all, to im- mentation, it is necessary to exam- plementing the measures con- ine what measures have been tak- tained within it. The objective is en in this area since the Programme to respond to the challenges fac- was adopted and what measures ing the climate and energy sector Julkaisu xxx 2011 are presently under way. To assess Locally, Renewably and Efficiently!

Advice on energy for consumers in North Karelia

Instant advice and information on energy has been tion on energy-efficient solutions and heating options available for consumers in North Karelia for the past as early on as possible during the planning stage. But two years, with help from the energy specialist Mo- the advice is also a way to keep people up-to-date on tiva. This will continue, as Motiva will also be availa- the potential for renewable energy and on energy effi- ble for assistance in 2013, and some decisions in prin- ciency in housing. The target groups in the project are ciple have been taken for continued cooperation at therefore builders and those interested in the possible least until 2016. benefits of renewable energy, as well as households in general. For more information on advice on ener- Advice on energy is coordinated by the Regional gy, events in the industry and the latest news, visit: Council of North Karelia, and those agencies main- ly involved in giving advice and information are the www.bioenergianeuvonta.fi Building Regulation Departments of the mu- nicipalities of and , the Finnish Forest Centre, Public Ser- vices North Karelia, the Centre for Economic Development, Transport and the Environment for North Ka- relia, and, a newcomer, the Mar- tha Organization in North Karelia. Other partners include Joen- suu Science Park and North Karelia Electricity.

A key aim in providing ad- vice and information on en- ergy in North Karelia is to improve the quality of con- struction and persuade de- velopers to focus atten-

2 North Karelia produces clean and renewable local energy

Eno Energy Cooperative: bioenergy “from root to boiler”

The wood energy enterprise has a broadband channels and heating sys- ing energy by providing woodchips for strong and broad base in . The tems. Cooperatives as a type of busi- a heat production plant. The encour- first bioenergy plant was incorporated ness are also used to help organise the aging example of neighbouring mu- in 1992. The number of heating plants retail trade. nicipalities helped promote the idea has increased greatly in the last few of introducing a new woodchip heat- years. There were already 490 heating The idea of bioenergy-based heat- ing system. The main reason for start- plants in Finland in 2010, and the num- ing in the Eno region was widely dis- ing a new form of power production ber of bioenergy heating boilers has cussed among policy-makers and for- was that policy-makers and municipal been growing even more quickly. In est owners in the 1990s. Even still, it officials had a very positive attitude to- North Karelia, there are approximate- took many years to introduce a heating wards using renewable sources of en- ly 35 bioenergy plants, which are man- system based on woodchips. In 1997, ergy. However, policymakers also har- aged by energy entrepreneurs. The av- the municipal council of Eno included boured many prejudices against forest erage amount of power that bioenergy a paragraph about energy wood utili- owners wanting to become heating heating plants produce is 580 kW. Co- sation in its strategy. While the idea of entrepreneurs. After few years of dia- operatives and limited companies con- gaining an eco-friendly image for the logue and consideration, the constitu- trol 55% of wood energy plants, while municipality was appealing, the main tive meeting of the Eno Energy Cooper- 45% are managed by separate firms point was to start using local energy ative was held in 1999 and number of and companies in association with one to replace oil heating in the Eno area. founding members was 12. All of the another. One of the biggest aims for the mu- members were forest owners. nicipality was also to provide jobs for A cooperative is modern form of en- the people living in town. At the same The objective of producing clear and lo- terprise that combines collaboration time, forest owners were trying to get cal renewable energy was coming true and know-how. The owners of coop- a better price for energy wood. Actu- and the cooperative and the munici- eratives are equal decision-makers and ally, there was not sufficient demand pality each committed themselves to each one has one vote. A cooperative for energy wood at that time. support this mission. The municipali- is a flexible type of enterprise, and it is Initially, only a few farms used wood- ty pledged to invest in a heat produc- possible to start one with only a small chip energy in the Eno region. The first tion plant and to buy the energy that investment. As a form of business, it meeting concerning woodchip energy it would generate and the cooperative is suitable for many fields of opera- was held in 1996. The main aim of the promised to take care of the operative tion. In Finland, cooperatives have built meeting was to produce district heat- actions, from acquiring raw materials

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to providing heating energy for cus- more in the future. For example, the 6. In 2004, the next heating plant tomers. The distribution of labour was process of acquiring raw material could and heating pipe system was clear: the municipality would work as be done together with other cooper- built in Eno’s lower village in the the investor and the cooperative as the atives. same way as the Uimaharju heat- operator. Later on, after earning money ing plant. Boilers: 0.8 MWth + from selling heating energy, the coop- Timeline 1.2 MWth with 1 MW heating oil erative bought the first heating plant 1. The first meeting in 1996 burner as backup system; Heat from the municipality. Altogether, the 2. The constitutive meeting in 1999 production: 6 500 MWh a year; Eno Energy Cooperative invested ap- 3. Commercial operation started in Heated volume: 123 238 m3, cov- proximately 2.5 million euros in heat- 2000 at Eno’s upper village heat- ering the municipal office build- ing plants and pipe systems during the ing plant. Boiler: 0.8 MWth (heat- ing, the health centre, the fire first twelve years. ing oil as a backup); Heat produc- station, the old people´s home, tion: 2 500 MWh a year; Heated business premises and thirteen ter- The Eno Energy Cooperative has sever- volume: 53 562 m3, covering the raced houses; Fuel consumption: al partners, of which the municipality primary and secondary school approx. 10 500 loose-m3 of wood- of Eno (later the city of Joensuu) is the buildings, the library, sports hall chips; Fuel storage: 300 loose-m3 most important. The Centre for Eco- buildings, terraced houses and the 7. In 2010, the city of Joensuu sold nomic Development, Transport and the church; Fuel consumption: approx. the heating plant and its heating Environmental provided financial sup- 4 000 loose-m3 of woodchips; Fuel network in the upper village to the port for the project. The Forest Centre storage: 100 loose-m3 cooperative. of North Karelia helped study the ben- 4. The cooperative was given the Pro 8. In 2011, the Uimaharju heating efits of producing woodchip energy. Countryside award in 2002. The plant network was expanded. New company’s rating is AAA heating customers included four One remarkable benefit of starting the 5. The cooperative built a heating terraced housing cooperatives and cooperative in Eno has been the level of plant in Uimaharju in 2002. It has two private housing cooperatives. collaboration with other cooperatives, been owned by the Eno Energy especially with the Tuupovaara Ener- Cooperative from the start. Boil- In 2012, the total power production of gy Cooperative, which was founded in ers: 1 MWth + 1 MWth (1 MWth the three heating plants in Eno is equiv- 1996. The Tuupovaara Energy Coopera- heating oil boiler as a backup alent to the annual energy requirement tive was the first bioenergy cooperative system); Heat production: 6 000 of 870 detached houses. Every year, ap- in North Karelia. Before starting an en- MWh a year; Heated volume: proximately 1.9 million litres of fuel oil ergy cooperative in Eno, the operators 111 200 m3, covering the prima- is being replaced by local eco-friendly visited the Tuupovaara Energy Cooper- ry school, the health centre and wood energy. CO2 emissions have been ative to learn about its good practices municipal community centre, reduced by 5 million kg a year. The to- and techniques. Collaboration between the church and fifteen terraced tal length of the heating network is 9 the cooperatives has been important houses; Fuel consumption: 9 700 800 metres. The network as a whole is throughout the project. The coopera- loose-m3 of woodchips;Fuel stor- owned by the Eno Energy Cooperative. tives might decide to collaborate even age: 300 loose-m3

4 Problems and future challenges

There have been a few problems Utilising energy wood has received material transport might no longer with organising woodchip heat- support from the government. One be as cost-effective. Also, the co- ing. One challenge at the begin- of the biggest challenges in the operative will be confronting chal- ning was to get enough dry tim- future has to do with uncertainty lenges in terms of leadership. The ber for chipping. Wood was stored about the subsidy policy concern- founding members will be retiring on the side of the road without be- ing the harvest and use of ener- in the near future. The cooperative ing covered at all. A simple solution gy wood. needs younger operators who can was to start using card covering for continue to carry out the project of wood storage. Other challenges The energy wood market is at a producing heating energy. included planning the heating sys- turning point. Larger companies tem and, especially, the pipe net- have begun to compete in the mar- Despite the challenges, the Eno En- work so that they would operate ket. When several enterprises are ergy Cooperative is looking to the in a cost-effective manner. Build- competing for the same raw ma- future very positively. The Cooper- ing an extensive pipe system was terial, it is more than likely that the ative has produced local energy for not possible because the Eno area cooperative will need to acquire the Eno area for many years and is very sparsely populated. The de- material for wood chipping from its aim is to continue doing so for cision was to build a system that further away. Currently, all of the as long as possible. The Eno En- covered the centres of the village raw material for heating plants is ergy Cooperative serves as a great where the largest public properties purchased within a 30 kilometre ra- working example of local and are located. dius of the municipality. If the dis- eco-friendly energy production in tance becomes much greater, raw North Karelia.

www.enonenergia.fi

Article was written as part of the RoK-FOR project. There is more information on the project at:: www.rokfor.eu

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Challenges for the Heating Business The heating business and its requirements

The heating business produces the business as well as on the risk ments and measurements of heat heat regionally to a single proper- management of the operations and generator systems as well as the ty, to a group of properties or to the economy. actual business operations. The an urban area through a heat sup- writer of the article has more than ply system. The heat generator sys- This article deals with the challeng- 25 years of experience in the field, tems and heat supply network may es, requirements and possible risk during ten of which he has been be owned by a business operator factors of the heating business. The operating as an entrepreneur in the or by a client. The ownership has topics discussed include the busi- heating business. an essential effect on the nature of ness start-ups and the procure-

Perseverance: a heat supply based on agreements

Being a heating entrepreneur calls 10 to 15 years. The contract de- area of a municipality is owned for perseverance. If an entrepre- fines and takes into account the by public organisations, and thus, neur invests in a heating plant implementation method for the these parties are the principal ne- and heat supply network, the op- heat supply, the measurement in- gotiators in terms of the heat pro- erational life of the equipment can formation and, most importantly, duction model. Normally, the mu- be dozens of years. The technical the changes in the heat prices and nicipality arranges a competitive operational life of a heating plant basic fees. Basic contract models bidding; the winning company is typically more than 20 years; should be applied, since there is then implements the heat supply. this can be significantly extend- no official single heat supply con- The bidding companies present ed by conducting regular mainte- tract model. What is important is their operation models for provid- nance and repairs. Furthermore, that the contract acknowledges the ing heat to the area, as well as their the technical operational life of a price of the heat and the underly- basic fee and prices. Eventually, pri- metal pipe network may even be as ing costs of price changes and that vate consumers may become cus- much as 40 or 50 years. The main these changes will be passed on at tomers and join the network ac- customer, normally a municipality, reasonable customer prices. cording to their own schedule. and the heating entrepreneur draw up a heat supply contract, the du- Typically, more than half of the ration of which usually varies from housing stock in the residential

6 It all boils down to design!

The crucial information that a heat risk regarding the size of the heat- entrepreneur needs is the number ing plant. If an entrepreneur in- of customers who will be joining vests in a plant that is too large, the heating system and their loca- the risk of unprofitability increas- tion in the target area. During the es. The measurements must there- establishment phase of operations, fore include the annual hours of the entrepreneur must decide upon use during which the plant is at the size of the heating plant, the maximum efficiency. If the degree technology, the measurements and of plant utilization is low, it will be the scale. Moreover, the location of impossible for an entrepreneur to the plant may depend on where cover the extra costs resulting from the customers’ properties are locat- the fact that the plant is too large. ed. However, typically the location On the other hand, a plant that is of a heating plant has been defined too small may lose many prospec- in the building plan by the munici- tive customers, and thus, the busi- pality already beforehand, but con- ness opportunities will remain un- sideration should always be given exploited. to exceptional cases. If the plant location is substantially far away Nowadays, it is quite common that from the largest heat users, the the procurements for the heat gen- costs of the transfer pipe building eration system are implemented in and the heat loss due to extending two phased solutions and with two the transfer network will increase. different boiler systems. First, the so-called main boiler is built and a The correct heat plant measure- building space reservation is made ments are crucially important from for the other boiler. The fuel stor- the standpoint of business profit- age may be designed and imple- ability and functionality. The deci- mented for the two heating boil- sion can essentially be made more ers already at an early stage. The easily if the amount of required two-boiler system may produce heat is already known during the heat already at a low heat load procurement phase. Typically dur- stage. The smaller boiler can gen- ing the planning phase, only about erate heat during summers, while half of the potential heat load is the other boiler may be undergo- committed to the shared heating ing maintenance during the down- solution. Therefore, the investing time, without there being any in- entrepreneur is forced to take a terruptions to the flow of heat.

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The available fuel will determine the heating plant technology Experts should be consulted re- type of fuel that the entrepreneur nual production capacity of a plant garding the acquisition of heat chooses. Before procuring an ex- is 5,000 MWh of heating energy, generation systems. In practice, the pensive heating system, it is worth a plant with a lower level of effi- price range for a 1MW system may ensuring that the delivered tech- ciency will consume 6,900 MWh of vary by hundreds of thousands of nology meets the heat supply ca- the chosen fuel. Correspondingly, euros. In addition, it may be chal- pacity defined in the contract. the need for fuel at a plant with a lenging to understand the real effi- higher level of efficiency is 5,880 ciency and feasibility of the techni- In the most extreme case, remark- MWh. The cost of purchasing extra cal choices for the plant at hand. At ably more fuel than estimated dur- fuel will be approximately 20,000 this point, it is essential to keep in ing the planning stage must be euros annually. Thus, investing in mind the long operational life and burned throughout the entire oper- heat generator systems more ex- reliability of the plant. In addition, ational life of the plant. This means pensive than 100,000 euros has al- the entrepreneur should consider a considerable amount of annual ready become more profitable in the fuel quality; it all boils down extra expenses, since all of the un- just five years. The extra fuel con- to the variety of raw materials necessary raw material will have to sumption will also result in extra and their size, the percentage of be bought, transported and stored. storage, transportation and ash fines and, above all, moisture. The The functionality of the plant is de- handling costs. technology of the heating plant is fined by its efficiency, which varies designed in accordance with the between 72% and 85%. If the an-

Potentials of heating entrepreneurship!

Heating entrepreneurship began in capacity of more than 300 kW in In addition, entrepreneurs have Finland in the 1990s. At the mo- Finland. At present, many heating also invested substantially in larg- ment, there are slightly more than entrepreneurs are aiming at build- er plants. Furthermore, several 500 heating plants in operation ing larger plants, with the min- combined heat and power (CHP) with close to 200 entrepreneurs. imum size being at least 1 MW. plants have been realised by entre- The operations have started as Hence, many, maybe even profita- preneurs. The remarkable invest- small-scale secondary occupations, ble, small-scale plants remain un- ments and guaranteed price sup- but nowadays Finland has a few exploited. port are helping to form the basis professional entrepreneurs both of CHP small-scale electricity pro- in the form of cooperative associ- When comparing Finland and Aus- duction in Austria. In contrast, the ations and limited companies. Still, tria, it can be concluded that there corresponding production support there is a lot of growth potential in are more than 4,000 heating plants and tariff pricing are not available the field. It has been estimated that in Austria. A remarkable number in same quantities in Finland. there are more than 3,000 poten- of them are small: plants that run tial heating plants with a heating on only a couple of hundred kW.

8 Interestingly, many Austrian heat small-sized plants increases, let us neurs operating in Finland might entrepreneurs have been and con- say, by up to ten plants. In this kind want to consider investing in small- tinue to be interested in invest- of a situation, we are already talk- er production plants. Then, natu- ing in small-sized, e.g. 300 kW, ing about a 3 MW production en- rally, special attention must be paid plants. As a single plant, the vol- tity. Moreover, from the entrepre- to the fuel quality and to minimis- ume of business will remain quite neur’s standpoint, the energy price ing disturbances to the immediate low, but the turnover will increase in these small plants is at a fair lev- surroundings. considerably if the number of these el. Therefore, heating entrepre-

Significant investment required!

A high level of investment is typi- of the funding must be organised heat is sold or not. The energy cal of the heating business. Invest- via bank loans and the company’s price based on the amount of en- ments are considerably large and own financing. With a ten-year re- ergy consumed produces revenue for a long amount of time. As an payment period, the annual loan for obtaining the fuel, labour ex- example, the required investments instalments will be 100,000 euros. penditure and other variable costs. for a 2MW heating plant and a Additionally, the level of interests, two-kilometre heat supply network It is essential for cash flow pur- bank commissions and necessary cost at least 1.5 million euros. The poses that the company receives securities play an essential role in funding is based on the estate fees regular revenue throughout the running the business successfully. and possible financial subsidies. Al- year. Therefore, part of the heat together, these total approximate- price consists of the basic month- ly 500,000-600,000 euros. The rest ly fees, regardless of whether the

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Serving customers with quality!

There is a need to increase the qual- tifications for environmentally re- gy companies for quite a while al- ity of customer service in the heat- sponsible and positive regional ready. ing business. It is no longer enough economic development – howev- that the heat is supplied and the er, these justifications need to be The heating business offers excel- customer receives an invoice each carefully documented and reported lent opportunities for doing busi- month. Customers increasingly to customers. Providing customers ness locally by utilising renewable need more information on heat with information on energy con- energy. Before starting out as an production and its environmental sumption development and envi- entrepreneur, however, it is worth effects. The local heat generation ronmental effects has been very learning the ropes. operations offer relatively easy jus- common among the larger ener- Asko Puhakka M.Sc. (Admin.), Lecturer Karelia University of Applied Sciences

Article was written as part of the RoK-FOR project. There is more information on the project at:: www.rokfor.eu

10 Energy industry events in North Karelia in the early part of 2013

11.-13.2. WES2013 Conference, KOLI The themes of the international conference at Koli are the potential for forest energy, regional energy production and the bioeconomy. 5.4.2013 Heat Entrepreneur Day (Biomas project) The theme of this event, held at Tuupovaara, is current issues connected with heat entrepreneurship. 20.-21.4. Ralvis North Karelia Construction Fair at Areena, Joensuu. Represented at the event will be a large number of specialist construction and housing companies. The fair will provide information on the various stages of a construction project, from planning on through to completion. There will also be presentations on housing energy solutions. 6.6. Bioenergy Technology Day (Biomas project) An introduction to bioenergy technology and its possible benefits at an event held in Nunnanlahti, . 7.-8.6. Silva Forest Exhibition Silva2013 is a free event for all those interested in forests, woodland and the countryside. In attendance will be a wide selection of companies and actors in the forest and energy sectors. There will also be news and the latest information on bioenergy.

Other events planned for 2013: A visit to the Oulu district to see of the year, there will be an infor- mation on energy events organised some examples of how bioenergy is mation and communications event for consumers and builders. being exploited. Hiking trips will be to promote the use of renewable organised in the spring and sum- energy, with information on heat- Further information on current mer for small groups to bioenergy ing systems and target mapping. events connected with bioenergy sites in North Karelia. At the end There will also be advice and infor- can be found at:

www.bioenergianeuvonta.fi

11 Regional Council of North Karelia Photos: Photl.com s. 1, Jouko Parviainen s. 7, 9, Pasi Pitkänen Rok-FOR-hanke s. 10, Stock.XCHNG s.12 [email protected] Graphic design: Laura Jussila, www.pohjois-karjala.fi/english Regional Council of North Karelia