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Karlshamn

Energy Cluster as development tool for the Baltic Sea Region

The EU has renewed its interest in the Baltic Sea region ’s proposed Baltic Sea Strategy for the and in December of 2007 the European Council asked Commission’s final report due June 2009 covers 4 the Commission to present a Baltic Sea Strategy. priorities: The strategy, which is to be presented in June of 2009, will be one of Sweden’s main goals during its 1 Environmental challenges for the presidency of the European Council. Sweden believes Baltic Sea region that the strategy should be a market oriented guide for EU member states in the Baltic Sea region to 2 Economic growth and competitiveness stake out common priorities regarding investments in infrastructure. The goal is to expedite shared 3 Efficient use of resources implementations of EU resolutions and harmonise domestic regulations in order to create larger and 4 Prevention of organized crime better regional markets. The 17th Baltic Sea Parliamentary Conference (BSPC) possible. will be developed further and will contribute to took place in Visby August 31st – September 2nd of sustainable solutions. But, as the Swedish government’s council 2008. The main theme for the conference was “Energy on globalisation has pointed out, traditional sources of electricity Efficiency and Climate Change”. Participating in the will continue to play a large role. conference, in addition to selected representatives from the Baltic Sea region countries, were also Efficiency representatives from the Council of the Baltic Sea States (CBSS) – the political forum for regional Buildings Transport Coal Plants intergovernmental cooperation. Topics covered at the Water Treatment Aircraft Engines Energy Services meeting were Baltic Sea region cooperation, climate Appliances Locomotives Water Treatment change and energy efficiency, energy supply and Lighting Equipment Svcs. Energy Finance Energy Finance Aviation Finance security, eutrophication, maritime policy and the Baltic Sea Action Plan, and labour market and social affairs relevant to the region. Low carbon power Renewables Natural Gas Base Load Regarding climate change and energy related issues the national governments, CBSS and the EU were encouraged to coordinate Wind Turbines Large-frame Turbines IGCC Cleaner Coal and work together in developing strategies for coming Solar Power LM Turbines ESBWR Nuclear discussions leading up to the UN Climate Change Conference Biogas Engines Energy Finance Energy Finance in Copenhagen in the fall of 2009 in order to gain support from the Baltic Sea region for the ambitious CO2 emissions reductions. Other recommendations brought forth in the Low carbon fuels resolution are increased cooperation to reduce vulnerability and improve adaptability as consequences of climate change impact, CO2Capture Biomass Fuel Cell H2 strengthen the capacity to support energy cooperation, support the construction and make greater use of land based and offshore BP H2 Joint Venture Energy Finance wind power plants, support transportation projects for energy Synfuels Technology Water Treatment and energy providers while minimising environmental risks for the Baltic Sea, and advance effective measures for developing renewable energy, energy efficiency and energy savings. Forest and agriculture

Sweden believes that enhanced cooperation among the Baltic Sea nations and the EU can increase the energy consumption The Baltic Sea region Interreg programme points to one strength efficiency. Priorities and resources need to be matched more in particular in that the region has a high capacity for knowledge efficiently and a macro-regional approach is required in the and development of renewable energy. However, the general Baltic Sea region to research this problem. knowledge regarding environmental issues has an east-west dimension. In order to improve the situation a holistic approach The strategy for the Baltic Sea region agrees with the EU across various sectors is required. strategy in regards to three prioritised areas of interest: The strategy of VASAB (Vision and Strategies around the Baltic 1. Reduction of greenhouse gas emissions Sea) for 2010 highlights several environmental goals that build on a transportation system that simplifies environmentally 2. Increased supply of renewable energy sources friendly mobility and integrates the region in an effective 3. More efficient energy consumption manner both internally and with the rest of the world. In addition there is a focus on energy production that relies more This increased cooperation requires incentives and funding, and on renewable energy and environmentally friendly sources of in 2007 the Nordic Investment Bank (NIB) decided to increase energy production. its contribution towards making the Baltic Sea region more During the spring a draft for a regional energy strategy was competitive. presented to facilitate energy conversion. The government has The debate at the BAFF (Bioalcohol Fuel Foundation) seminar been tasked by the county administrative boards (Länsstyrelsen) in Gothenburg showed the necessity to differentiate between in Stockholm, Norrbotten, Skåne and Kalmar to in cooperation good and bad . The EU is now developing sustainability with the Swedish Energy Agency arrive at a regional energy criteria to make this distinction. These criteria will define strategy. The investigation concludes that it is important to how much a biofuel must reduce emissions secure efficient modes of transport for energy supplies and to compared to traditional fuels in order to be called a biofuel. This plan especially for suitable storage to accommodate the more will probably mean that a biofuel must reduce carbon dioxide voluminous biofuels. emissions by at least 50% over its lifecycle. For transportation of biofuels from other continents, or even just The pursuit of alternative or renewable fuels will bring many across the Baltic Sea, maritime shipping is especially suitable. questions to the forefront. The political task is to set a price However, efficient biofuel cogeneration plants (CHP) require on emissions in a neutral fashion in order to benefit the most that the fuel is used and stored in connection to the facilities in environmentally sound methods. closed systems. This is due to among other factors fire safety For Sweden this means to remain open to as many solutions as reasons. But the possibility to temporarily store biofuels near ports and harbours can be attractive for large ocean faring vessels that can access the Baltic Sea in order to transfer Karlshamn can the goods to smaller ships or rail for further transport. In Sweden’s case hydroelectric and nuclear power cover - Comprise a defined cluster in the Baltic Sea region most of the energy needs. Natural gas from where possibilities for developing new alternative and make up only 2% of total energy use and energy solutions for the Baltic Sea region should be there are ambitious plans to further the use of renewable pursued. energy and decrease the dependency on fossil fuels. 25% of Sweden’s total energy use is supplied by renewable - Become a toolbox for enhancing the efficiency of biofuels. However, it should be kept in mind that almost traditional energy solutions and complement them 40% of our imported oil currently comes from Russia. with a focus on renewable energy. - Comprise an essential hub for the region in Karlshamn’s opportunity handling biomass and other fuels. to contribute significantly and biogas production to the Baltic Sea region’s There is a consortium of Swedish and Norwegian interested parties planning to build a facility for large future energy supply. scale ethanol and biogas production in direct connection to the port area and Karlshamn Kraft AB’s (70% E.ON, Karlshamn has since long been identified as a 30% Fortum) existing power plant. The permit process is suitable location domestically for energy prod- underway and there is an option agreement regarding this uction. The biggest reasons for this are: establishment. • Access to relatively easily accessible land. The engineering phase which also covers the quay belonging to the • Access to a large deep water port. facility has been partially completed When completed the facility will produce 260 000 m3 of ethanol and • Access to the main Swedish power grid with 1 200 GWh of biogas per year according to the permit application. possibilities for expansion. Construction will take place in two stages. Grain and straw will be the raw materials. These will primarily be Other factors that make Karlshamn unique from an shipped from the Baltic States, , the Ukraine, Belarus and energy perspective are: Kazakhstan. Distribution to the facility will be via shipping from ports on the eastern shores of the Baltic Sea. • Large storage capacity for petroleum and The facility will produce second generation biogas from its chemical products. inception. Second generation bioethanol products will be developed • Large reserve and backup power plant. in parallel. Finished ethanol will mainly be brought to market via maritime • Large industrial production of vegetable oils. distribution to be mixed with and to a certain extent to • Large operation handling biomass connected produce E85. to the forestry industry. Biogas can be distributed in a number of ways: trucks, on rail, on ships and by pipeline. In the project the possibility to connect the • Submarine power cable to Poland. facility to the existing gas distribution network in Skåne is considered. • High competency in the energy and processing The processing will create vast amounts of fertilizer for agricultural fields. use. This fertilizer requires considerably less energy to produce than chemical fertilizers. It can be distributed on trucks, on rail and by boat. Remaining bio residues will be burned as fuel in the power plant that will be built in connection to the facility.

ENERGY COMBINATION stage 1

Bioethanol 130 000 m3 Biogas for heat/elec- Industrial wheat: Nordisk Etanol- tricity 0 – 600 GWh 345 000 tonnes produktion AB Biogas 600 GWh Straw: 80 000 tonnes Ethanol plant

Refinement steam electricity Bio residue 100 GWh

Refined biogas Solid bio residue 0 – 600 GWh Power plant Production Point of connection for offshore wind power Directly connected to the oil depot area of the harbour lies Karlshamn is connected directly to the main Swedish electricity Lantmännen Ecobränsle’s facility for the production of grid through the Karlshamn power plant. Therefore, Karlshamn biodiesel. According to the permits 110 000 m3 of biodiesel may is a suitable point of connection for large scale offshore wind be produced per year. Biodiesel is used as an additive for B5 as a power. Within the southeastern part of the Baltic Sea area renewable component of diesel and as the pure biofuel B100. belonging to Sweden there are several possible sites of interest for wind power development. The combination of an existing The raw material used for at this plant is maritime power cable to Poland and possible future cables oil which is delivered via pipeline from the AAK’s to / makes this part of the Baltic Sea region (AarhusKarlshamn) facility. Large amounts of methanol are particularly attractive. handled in the oil depot and some if this is used as an additive Current Swedish goals aim to produce 10 TWh from wind power when producing biodiesel. by 2015. The county administrative board of Blekinge aims for Market ready biodiesel (rapeseed methyl ester – RME) is offshore wind power to produce 0,2 TWh by 2020. pumped via pipeline to storage tanks at the oil depot and is then transferred to ships or trucks. Smaller amounts can also be stored in direct connection to the facility and can be transferred Submarine power cable between Latvia/ to tanker trucks or rail. Renewable energy for the production Lithuania and Sweden facility is delivered by AAK mainly in the form of steam. Access to the oil depot, route 29, E22 and rail, as well as access Baltic Ring (interconnected electricity supply around the Baltic to rapeseed oil, methanol and renewable energy for processing Sea) was presented in 1998 as a part of the Trans-European are all important to the biodiesel production in Karlshamn. Network – TEN. The organisation BALTREL was created with the purpose to successfully steer the project. One of the Karlshamn – Sweden’s center organisation’s initial meetings took place in Karlshamn in Lantmännen Ecobränsle September 1998. Methanol From Karlshamn the Nordic grid is connected to the Polish grid via a submarine cable that was installed around the year 2000. Lithuania promised that in connection with its entry to the Lantmännen EU to terminate its use of nuclear power by the year 2009. Rapeseed AAK Rapeseed oil Ecobränsle RME In all likelihood this will be postponed. In conjunction with biofuel terminating nuclear power both Lithuania and Latvia run the risk of having a drastic lack of energy supply. To create an additional submarine power cable connection Rapeseed protein Glycerol between Sweden and the Nordic grid and Latvia/Lithuania is seen as essential. Karlshamn is therefore a possible junction for connecting to the Rapeseed oil production main Swedish electricity grid. Lantmännen Energi and AarhusKarlshamn AB have signed a letter of intent to form a jointly owned company to invest in increasing the capacity for rapeseed oil production both for Logistics hub for handling biomass and for biodiesel production in Karlshamn. The planned The use of wood as a raw material in the production of energy investment of around 400 million SEK will bring a significant is expected to increase. Even if it is available in a certain radius increase in capacity compared to what is possible in Karlshamn around power plants built in areas with forestry industry in all today and the facility will become the largest in the Nordic likelihood there will be a need to import wood. countries by a wide margin. By utilising the most modern There will also be a need for ports where wood pellets and wood technology available it will be among the most efficient in the chips can be unloaded, primarily from larger ships, to temporary world and will be housed in the AAK industrial area. storage and further distribution via rail or smaller cargo vessels. Larger cities in particular lack access to biomass and also often lack the physical space necessary for large scale biomass Increased cogeneration production handling. In order to supply existing and planned industries with steam An important factor that affects the future supply of wood as fuel E.ON is planning to build a cogeneration plant (combined heat is how much is imported. Imports primarily are supplied as: and power – CHP) directly connected to the Karlshamn power • Pellets from North America, the Baltic States and plant. Using biofuel combined with bio residue from the planned • Wood chips and whole trees from the Baltic States ethanol and biogas facility; steam, heat and electricity will be generated. • Sorted wood or demolition wood from Germany and the Steam and heat can be distributed to the industrial and residential district heating networks while the electricity is Exploitation areas in the vicinity of the Port of Karlshamn delivered directly to the electrical power grid. as well as access to “cheap” energy also create the right Synergies with the Karlshamn power plant’s existing environment for biofuel refinement. For example the district infrastructure as well as switchgears, laboratories, control heating network’s surplus capacity can be used for drying rooms, machine shops, personnel, a site dedicated for energy biofuels during a large part of the year when the demand for heat production, etc. make this location especially suitable. is lower. The export of biofuels, wood chips as well as more refined forms, is believed to increase in demand when the time comes to attain the EU environmental and climate goals. Developing air pollution control Regional expansion of the district heating E.ON and Fortum’s Karlshamn power plant has a long tradition network of development work on various forms of air pollution control. Deliveries of excess heat from the various energy combinations The facility today is the largest peak load and reserve power in the area will lay the foundation for a continued expansion of plant in Scandinavia, which means it has a low utilisation. the district heating network. Currently considerations to connect Anyway, it has still evolved into one of the cleanest power plants Olofström to the existing network in Karlshamn are underway. of its kind in the world, with catalytic converters for nitrogen oxide removal as well as sulfur scrubbers. The power plant faces an exciting future with increased investments, for example Intelligent logistics towards developing carbon dioxide separation. At Blekinge Institute of Technology in Karlshamn there is ongoing research regarding intelligent logistics. Production of solar cells The purpose is to use optimisation models combined with In Vilshult circa 40 km from Karlshamn there is a facility run mobile communications in order to reduce the mileage of freight by PV Enterprise that produces solar cell panels and employing transfers. The creation of a modern road tariff system for heavy about 30 people. PV Enterprise is a Swedish company that goods vehicles is a key part of this area. Cooperation with specialises in the development and production of solar cell Lithuania in the form of various projects has taken place and panels. By utilising innovative, high quality products and now the next focus is on the ITS World Congress 2009. a highly automated production PV Enterprise is able to Blekinge and Karlshamn have worked towards developing green successfully compete in the international rapidly growing market transport corridors in several projects; for example in the East for solar energy. West Transport Corridor (EWTC).

The geophysical attributes for developing a strong energy cluster are very favourable west of Karlshamn. Karlshamn as an energy site today

Biodiesel production Vegetable oil production Lantmännen Ecobränsle’s production capacity is 45 000 m3 of AAK AB annually produces circa 110 000 tonnes of rapeseed biodiesel produced from rapeseed oil. It is distributed on tanker oil and 160 000 tonnes of rapeseed meal, using circa 270 000 ships and tanker trucks. tonnes of rapeseed in the process. The rapeseed oil is used for food and technical use as well as a raw material for biodiesel. The rapeseed meal is sold as a protein feed for the animal feed Electric power production industry. In addition to rapeseed oil another 200 000 tonnes of 1 000 MW other vegetable based oils such as palm and are refined Karlshamn power plant: the world’s cleanest oil fired power for the food industry. plant. Also, within the Technical Products & Feed business another 85 000 tonnes of fatty acids, 55 000 tonnes of feed fat, and circa Electricity transmission 5 000 tonnes of vegetable based lubricants are produced. Part of the Swedish and Nordic main power grids for electricity distribution. Reserves for further connections. 600 MW Waste heat recovery submarine power cable to Poland. Fossil fuel free waste heat recovery is today delivered to Karlshamn Energi AB. Deliveries from Södra Cell, Mörrums Storage Capacity Bruk 50 MW. Capacity to store in excess of 1 million m3 of petroleum Fossil fuel free reserve power from AAK 20 MW. products. Partially used for distribution, partially as strategic A well developed district heating network exists in the area. or intermediate or storage depot for oil for different countries. Storage capacity for propane of 150 000 m3. This gets Importation of biomass distributed to Sweden and to Poland. Approximately 750 000 m3 of wood and wood chips pass through the port of Karlshamn each year. Södra Cell, Mörrums Bruk currently brings more than 1 million m3 of wood to its pulp mill every year.

Main electricity power grid

Kontakt:

Karlshamns Kommun: Anders Wiberg tel: +46 454-30 50 29 [email protected] E.ON: Henrik Svensson tel: +46 70 588 90 35 [email protected] Nordisk Etanolproduktion AB: Mikael Runesson tel: +46 454 307155 [email protected] Lantmännen Ecobränsle: Per Erlandsson tel: +46 454-827 15 [email protected] Karlshamn Energi AB: Hans- Inge Bengtsson tel: +46 454-818 00 [email protected] Karlshamns Hamn AB: Ulf Sandevärn tel: +46 454-030 50 02 [email protected] AAK AB: Magnus Jörsmo tel: +46 454 82 000 magnus.jorsmo@.com