Stockholm Exergi to close final coal-fired boiler ahead of schedule

Previously known as Fortum Värme AB, Stockholm Exergi is an energy utility that operates in the Swedish capital and is jointly owned by the City of Stockholm and Finland-headed energy major Fortum Oyj.

We have a clear focus on our business and that is that we should be resource and climate-neutral and it is gratifying that we can phase out the last coal from Stockholm’s district heating system already, two years ahead of schedule. At the same time, this poses a challenge as we have been unable to expand renewable production at an equally rapid rate. Therefore, we work intensively not only with the phase-out but also with optimizing our operations so that we can guarantee the security of delivery for our customers, the Board said in a statement

Stockholm Exergi’s facilities produce both heat and electricity and are therefore important both to ensure the heating demand in the city’s buildings and to contribute to the electricity demand in the region. Through a large investment commitment and a new cooperation agreement with the electricity company Ellevio, the company will be able to secure sufficient electricity power based on renewable fuels, despite the earlier closure of KVV6.

Increased cost due to regulation change

Earlier in 2019, tax regulations for the use of fossil fuels in cogeneration plants were changed, which has significantly increased the cost of using KVV6. One boiler in the two boiler block was closed in spring this year. According to Anders Egelrud, CEO, Stockholm Exergi, this has also affected the decision.

We have always intended to close KVV6 shortly, but the tax changes have been a factor that has influenced the decision already made. We must also optimize our business financially and have therefore done thorough analyzes of how we should best continue the business based on today’s conditions. Our plan ahead is based, among other things, on continued investments in renewable production and on developing the technology in the district heating system so that we can equalize peaks and valleys in the heat supply, said Anders Egelrud.

In the longer term, the need to expand production capacity in the Stockholm area remains, both to create greater margins in the system and to enable the establishment of several companies and residential areas in the region.

Therefore, production from KVV6, and also from the aging Hässelbyverket, needs to be replaced with new base production based on renewable or recycled fuels. As previously announced, Stockholm Exergi is investigating the possibilities of establishing a brand new “closed-loop” facility in the region.

The main alternative is to build in Lövsta, Hässelby, and to link the distribution system in central Stockholm with the north-west, to facilitate transmission and equalization.

Decision welcomed by City Hall

The decision by the Board on December 6, 2019, has been welcomed by local politicians.

The City of Stockholm should be at the forefront when it comes to environmental and climate issues. The fact that Stockholm Exergi is choosing to phase out the coal is already welcomed, as it is in line with the city’s conversion to a sustainable and fossil-free Stockholm, said Anna König Jerlmyr (M) financial mayor for the City of Stockholm.

Katarina Luhr (MP) Environment and Climate Citizens Council City of Stockholm, also welcomed the decision.

This is a big win for Stockholm’s climate work that the city’s last coal-fired power plants will be closed as early as 2020. The coal-fired power plant in Värtan is a major source of emissions and emitted half a million tonnes of carbon dioxide in 2018. With this decision, Stockholm is taking another big step forward towards the goal of a fossil fuel-free city, remarked Katarina Luhr (MP).