Helen presents new distributed model for reducing carbon dioxide emissions

The new plan is based on Helen’s development programme towards a carbon-neutral future. The studies have investigated various options to reduce carbon dioxide emissions by 20 per cent on the 1990 level and to increase the share of renewable energy to 20 per cent. In order to meet the targets required by the City Council of Helsinki, Helen has designed a model that in its first stage focuses on heat production with biofuels while seeking options of extensive utilisation of, e.g. solar heat, geothermal heat and heat pumps. The ultimate decision will be made by the City Council of Helsinki.

The first significant investment project would be a pellet-fired heating plant in the Salmisaari power plant area, replacing the oil-fired heating plant. The new heating plant could be commissioned in 2017 and it could produce an amount of energy that would meet the heating need of 25,000 one-bedroom apartments. The next step would be to build a large bio-energy heating plant in the Vuosaari power plant area and possibly also at another construction site. The City of Helsinki could make a decision on terminating the operation of the Hanasaari cogeneration plant in the early 2020s once ensuring sufficient heat production capacity.

Carbon dioxide emissions from Helen’s energy production have remained almost at the same level since 1990 although its production volume has grown by 45 per cent. Helen’s current city energy concept is based on the internationally awarded, energy-efficient cogeneration of electricity, district heat and district cooling and extensive utilisation of waste energies. Helen, which is Finland’s largest producer of solar electricity, is building more solar power plants. Energy storage and the development of demand-response management services are also continued.

Extensive studies on various options

Based on the energy policies defined by the City of Helsinki in 2008 and the decision taken by the City Council on 18 January 2012, Helen carried out a thorough investigation of two implementation options: building a new multifuel power plant in Vuosaari and making modification investments to enable significant increase in pellet combustion at the Hanasaari and Salmisaari power plants. Helen also studied a new option based on distributed production.

Helen has extensively assessed the different implementation options from the environmental point of view, as well as with respect to economic and technical feasibility. The studies are based on market analyses and different scenarios of future trends. All of the options would place a burden on Helen’s finances. In the current upheaval of the energy markets, the Board of Directors of Helen Ltd finds that there is no economic basis for implementing any of the above options. However, the Board finds that the best option to meet the climate targets set by the City of Helsinki is to introduce a new model that will gradually introduce various renewable energy solutions, utilising new technologies and innovations. This solution is seen to be compatible with the targets defined by the task group on distributed energy generation and energy efficiency established by the City of Helsinki.

Development of the operating environment and energy markets involves great uncertainties, and the outlook is still unclear. As we are heading towards carbon-neutral production, it is better to progress with projects that are implemented one stage at a time. That way we can utilise the development of the markets and technologies when making investment decisions,’ says Pekka Majuri, Chairman of the Board of Directors of Helen Ltd.

Facts

Investigated implementation options of the development programme

Helen’s new option: distributed model based on separate heat production

• In this option, the necessary investment is made in the form of flexible and distributed solutions.
• The Salmisaari oil-fired heating plant will be replaced with a new pellet heating plant, which can be commissioned as early as 2017. The output of the plant is about 100 MW.
• Building a new bio-energy heating plant in the Vuosaari power plant area and possibly at another plant area.
• The fuels used at the bio-energy heating plants will be pellets and/or wood chips. The use of biocoal is also possible.
• This option would enable the use of various energy efficiency solutions and new heat production solutions (e.g. heat pumps, solar heat and geothermal heat), which would be implemented in stages once feasible. These solutions can be implemented by Helen and other operators, e.g. property owners.
• The solution would meet the targets of reducing emissions and increasing the use of renewable energy set out in the development programme.
• The challenges of increasing the use of biofuels are related to their availability, acceptability and price.
• This option is partly incompatible with the City Council’s energy policies as it replaces cogeneration with separate production of district heat. However, Helen finds this option feasible in terms of the energy market outlook. International analytics firms predict that electricity wholesale prices will continue to remain low for so long that it is not worth making new investments in combined heat and power generation. Furthermore, Helen will still have a lot of cogeneration capacity, due to which a fall in the cogeneration volume remains relatively modest.
• This option reserves the possibility of building a CHP plant in the Vuosaari area at some time in the future.
• Once the bio-energy heating plants have been commissioned and it has been possible to ensure sufficient heat production capacity in the early 2020s, it would enable phasing out the operation of the Hanasaari CHP plant. In that case, most of the power plant area would be released for other use. It would then be possible to build a bridge connection between Sompasaari and Kruununhaka (Kruununhaka–Nihtisilta).
• This option is feasible on the basis of the environmental impact assessment.
• The investment required by this option totals about EUR 360 million. In terms of overall costs, this option is the most favourably priced.

The other options investigated

Multifuel power plant in Vuosaari to replace the Hanasaari power plant

• Vuosaari C, a new multifuel power plant, to be built in Vuosaari, producing district heat and electricity with cogeneration.
• The district heat output of the plant is 350 MW and electric output 200 MW. The main fuels are forest chips and coal, but other biofuels (pellets, bark, sawdust, wood chips, field energy) are also applicable.
• The multifuel power plant can use biomass and coal with any mixture ratio. The possibility of using 100% coal is necessary due to poor storability of biomass and to safeguard secure supply of energy. 
• According to estimates, the power plant will be completed in 2022 if the decision to build it is made in 2015.
• Efforts will be made to acquire as much of the biofuel in Finland as possible, but a significant part of it will probably have to be imported. This is impacted by, e.g. the need for large volumes of fuel and the coastal location far from Finland’s forest energy sources, which increases the transport costs of domestic wood and, on the other hand, enables direct transport by ship from abroad.
• Fuel can be transported to the plant by ship, lorry and train.
• The project will meet the development programme’s targets of emissions reduction and increased use of renewable energy when biofuels account for about 60% of fuels used at the power plant.
• For this option, a heat transmission tunnel would have to be built from Vuosaari to Hanasaari.
• Vuosaari C will replace the Hanasaari power plant, the operation of which will cease, releasing most of the Hanasaari area for other urban development. The Kruunuvuori bridge between Sompasaari and Kruununhaka (Kruununhaka–Nihtisilta) can be built as part of the project once fuel transportation to Hanasaari ceases after the commissioning of Vuosaari C, which is estimated to be in spring 2023.
• According to the environmental impact assessment, this option is environmentally feasible, but it requires further planning and implementation of mitigation measures.
• The investment required by this option totals about EUR 960 million. This option is the most expensive in terms of its total costs.

Mixed combustion of pellets and coal at the Hanasaari and Salmisaari power plants

• Coal will be replaced by wood pellets at the Hanasaari and Salmisaari power plants with the ratio of pellets at 0–50% of the heat output and coal at 0–100%. The main components of the power plants (incl. boiler and turbine) will remain unchanged.
• Wood pellets or wood-processed bio coal are suitable as fuel. Extensive mixed combustion of pellets will start in the early 2020s.
• Based on overseas references, mixed combustion of pellets in pulverised coal boilers is a feasible solution, however, its technical implementation and the achievable proportion of biofuels are case-related.
• The challenges of increasing the use of biofuels are related to their availability, acceptability and price. In this option, some of the pellets are available in Finland, but a significant share will have to be imported.
• The fuels used at Hanasaari will be transported mainly by ship, but also by road.
• Coal would still be transported to Salmisaari by ship, but ship transport of wood pellets would require large storage facilities, for which there is no room. For that reason, pellets would be transported to Salmisaari by road. On winter weekdays, an average of three pellet lorries will arrive at Salmisaari every hour. In addition, an average of two coal ships per month will arrive at Salmisaari in the winter season.
• This option would require investment in the power plants’ combustion technology and a catalyst to reduce nitrogen oxide emissions at Hanasaari, as well as a new desulphurisation plant. Otherwise, there will be no major changes to the power plant processes.
• Covering the open coal depot at Hanasaari, which is presumed to be required by the City, has been set as a boundary condition for the project. In addition, it would be necessary to build equipment for the reception, storage and handling of pellets in this option. The costs of this option also include environmental and modernisation investments needed at the Hanasaari power plant until the 2040s.
• For the time being, the Hanasaari area will remain in power plant use in the current extent. As the power plant operations require transport of fuels by ship, the implementation of the last section of the Kruunuvuori bridge from Sompasaari to Kruununhaka (Kruununhaka–Nihtisilta) is in stark contrast to the power plant operations. 
• The project will meet the targets of the development programme to reduce emissions and increase the use of renewable energy when the share of pellets at Hanasaari and Salmisaari is about 35%.  
• According to the environmental impact assessment, this option is environmentally feasible, but it requires further planning and implementation of mitigation measures.
• The investment required by this option totals about EUR 300 million. The total costs of this option are between the other two options presented.