Helen ready to phase out coal, calls for stronger ETS
In Finland, Helsinki-based energy utility Helen Oy says it is preparing to phase out coal in energy production. The Government’s legislative proposal to ban coal, presented October 18, 2018, will accelerate the investment decisions, but it will also prevent utilisation of new, developing technologies, the company says.
On October 18, the Finnish Government submitted to Parliament a legislative proposal to ban the use of coal in energy production. According to the proposal, coal will be phased out in energy production during the 2020s.
Helen already started to phase out coal in 2015 by deciding to close the Hanasaari power plant by the end of 2024. As a result of the closure of Hanasaari, 400 MW of heat production capacity will be removed. All in all, Helen’s district heat capacity will fall by 870 MW and electricity generation capacity by 380 MW as the use of coal is discontinued.
The first of the plants acting as substitute for the Hanasaari power plant are already generating energy. So far, 114 MW of alternative energy production has been built: a new pellet-fired heating plant in Salmisaari and a new underground heating and cooling plant under the Esplanade Park.
In addition, Helen has decided to expand the Katri Vala heating and cooling plant with one new heat pump, output 18 MW. Finland’s largest heat storage facility is currently under construction in the old oil caverns in Mustikkamaa.
More heat in Helsinki needed
However, Helen also notes that Helsinki needs more heat production in addition to the plants which have already been implemented and which are currently under construction. Some of the production capacity to be decommissioned can be replaced with energy efficiency measures, heat storage, and demand response.
Currently the fastest way to replace coal on a large scale is the use of biomass. The coal ban will increase the need for biofuels in Finland. The availability of biofuels is a key issue as, according to Helen, there is not enough domestic biofuel for everyone. Helen aims to procure biomass from sustainable sources.
Preliminary studies on the replacement of coal have already been carried out at the Salmisaari combined heat and power plant that uses coal and pellets as fuel. Now that the timetable and contents of the Government’s proposal have been confirmed, we can start drafting a more detailed investment plan, said Janne Rauhamäki, Head of Unit at Helen.
According to Rauhamäki, the investment decisions for replacing coal must be made within two to three years, especially if it is a question of a plant location with no previous energy production. It is not possible to consider new developing technologies within this timeframe
The availability of new sites suitable for energy production and the permit procedures for new plants are time consuming processes in the Helsinki region. At the moment, the lead time of new projects may be up to 10 years, Rauhamäki pointed out.
Helen is currently studying the possibility of building bioenergy heating plants in Patola, Tattarisuo and Vuosaari. No investment decisions on the bioenergy heating plants have been made yet. In order to replace the Hanasaari power plant production, one or two new bioenergy heating plants are needed.
Strong emissions trading needed
Helen says that it will invest upward EUR 500 million in low-emission production over the next few years. Furthermore, the company believes that a strong emissions trading system should be the primary steering mechanism to reduce emissions in the EU area.
All of the company’s power plant assets are within the EU’s emissions trading scheme. This means that the national measure aimed at the emissions trading sector will reduce Finland’s regional emissions, but not emissions in the EU.
In order for the coal ban to achieve genuine reductions in carbon dioxide (CO2) emissions in the EU area, the Finnish government must commit itself to cancelling the corresponding, freed emission allowances.
The reform of the emissions trading legislation provides scope for this, but it has not been directly tied to the proposed coal ban legislation. The cancellation must not be left to the “political discretion” of future governments, the company said.