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The Danish energy company Ørsted is in the midst of a major transition from fossil fuels to renewable energy sources. Statkraft is contributing to the turnaround by supplying wood chips to the energy giant's new biomass power plant in Skærbæk.

Team membersMembers of Statkraft's biomass team are (from left) Chris Moore, Tiago Thomaz, Elizabeth Warren and Michael Shoenig. (Photo: Ivar Kvaal)

Statkraft biomass

> Statkraft's biomass team is based in the UK and for four years has been trading in biomass, such as wood pellets and wood chips.
> Statkraft's biomass production takes place at Tofte in Hurum Municipality in Norway, on the site of a former cellulose production plant. Statkraft has two employees in Tofte responsible for management of day to day production, while the biomass team is responsible for service contracts, customer contact and logistics.
> In the long term some of the biomass will be used by Silva Green Fuel, established by Statkraft and Södra Cell in 2014 to produce biofuels.
> Certifications: Sustainable Biomass Partnership (SBP), Forest Stewardship Council (FSC), Pan European Forest Certification (PEFC) and ENplus.

Hand full of wood chips(Photo: Ivar Kvaal)

Learn more about Statkraft's wood chips biomass:
"Old timber, new energy"

Two yellow front-end loaders shuttle between giant piles of wood chips and the cargo ship Wilson Nice. The wharf at Statkraft's biomass plant at Tofte in Hurum Municipality in Norway is buzzing with activity during loading operations.

Time is money in this business. Two hundred and sixty nautical miles further south, the customer prepares to receive 3 895 tonnes of Norwegian, certified sustainable biomass.

Quality

"Norwegian wood chips are high quality, but cost a little more than what we buy from the Baltics," says Søren Sripathy, Senior Biomass Originator at Ørsted's newly upgraded biomass power plant in Skærbæk, in south-eastern Jutland.

He shows us around a state-of-the-art plant, which will be completed by the end of the year. The original gas-fired power plant has been replaced with wood chip storage, a conveyor belt, boiler building, treatment facility, district heating pump and a deep-water wharf that can handle two cargo ships simultaneously. Now Wilson Nice from Tofte is waiting to unload.

"In the long term, we think Norwegian biomass will be competitive when we take all the parameters into consideration," says Sripathy, and continues:

"As a purchaser, we're particularly concerned with sustainability and traceability, chip quality, service level, flexibility and of course price. Distance is also important. Shorter shipping contributes positively to the carbon footprint and increases flexibility, such as during cold periods when we need refills quickly."

The agreement between Ørsted and Statkraft on delivery of wood chips was signed last year and will run for several years.

Sustainability is extremely important for the large energy customers. They are moving to a greener business.

Restructuring

At full operation, Skærbæk power plant will supply 60,000 households with district heating. The plant's wood chip boilers have a maximum power output of 95 MW. Together with the municipal power utility TVIS, Ørsted has invested DKK 1.8 billion in the facility as part of a large-scale turnaround operation, from coal and gas to biomass and offshore wind.

The state-owned energy company with operations in several European countries has reduced its coal consumption by 73 per cent since 2006 and set a goal to be coal-free by 2023.

When the goal was presented in February 2017, CEO Henrik Poulsen stated that "the future belongs to renewable energy sources".

"When we use sustainable biomass, we achieve significant CO2 reductions compared with coal and gas. Our pellets and wood chips come from forests that are continually re-planted, so new trees can absorb the CO2 we release when we burn the biomass," he said.

The Danish energy giant, which has sold off its gas and oil operations, has changed its fossil fuel-related name DONG (Danish Oil and Natural Gas). The new name Ørsted is taken from Danish scientist Hans Christian Ørsted (1777-1851) known for, among other things, discovering the connection between electricity and magnetism.

It's not just a matter of understanding what customers need right now, but what they will need tomorrow.

Good relations

The biomass on board Wilson Nice is carefully inspected by personnel contracted by Statkraft and an independent inspector. The size and moisture content of the chips are of great importance to customers. For example, Ørsted requires a moisture content of 43 per cent to avoid dust formation during production.

"Different customers have different needs," explains Elizabeth Warren, Commercial Operations Manager on Statkraft's biomass team. "We rent machines that produce chips with the correct dimensions, and use timber that provides the desired moisture content. When a customer wants drier wood chips we use older material, while fresher wood results in wood chips with higher moisture content. At the plant in Tofte we can tailor the product to customer needs."

On this occasion, being the first delivery to the Skærbæk plant, the entire biomass team is in place during loading. Close dialogue between everyone involved is important to ensure that the customer receives the best possible service.

Michael Schoenig, who is senior biomass trade originator for Statkraft's biomass team and hires the ships used, has a cake for the crew.

"This will be the ship's 200th crossing, and that has to be celebrated! Having a good relationship with the captain and crew makes our job easier," says Schoenig. He is very pleased with the facilities at Tofte.

"Most ports are busy and are operated by large cargo companies. Here we own the wharf facilities ourselves and have full control over the traffic in and out. This avoids costly delays while waiting for a slot for loading and unloading. It's also a big advantage for the customer that biomass is the only thing shipped from here. This eliminates the risk of contamination from other materials such as metal and sand, which can cause problems in the customers' biomass plants."

Ship with wood chips arriving in Denmark

Ørsted (formerly DONG Energy)

> One of northern Europe's leading energy companies
> Founded in 2006 through a merger of six energy companies
> 5,800 employees, DKK 61 billion in revenue in 2016
> Must be coal-free by 2023
> Changed name to Ørsted at an extraordinary general meeting on 30 October 2017
> Chief Executive Officer: Henrik Poulsen
> Main markets: Denmark, UK, Germany, Netherlands
> The Danish state owns 50,1 per cent of the Group

Ørsted's power plant in Jutland

(Photo: Ivar Kvaal)

Skærbæk power plant

> Previously a gas and oil power plant, now converted to biomass
> Owned by Ørsted
> Consumes approximately 450,000 tonnes of wood chips annually
> Full operation is planned by the beginning of 2018
> Has several suppliers of wood chips, including Statkraft
> Has Denmark's largest open wood chip storage facility with space for 80,000 cubic metres of chips
> Is Ørsted's largest biomass power plant run on wood chips

Customer needs

The head of Biomass Trading and Origination in Statkraft, Chris Moore, is committed to responding to customer needs.

"Our starting point is that the biomass is to be used for energy production, and we don't sell waste material from other businesses, such as paper production. We concentrate on how the wood chips behave in the boiler, how the weather changes customers' supply needs, and how we can assist customers with limited storage space," he says.

The efforts made to achieve different certifications further demonstrate the company's customer focus.

"Sustainability is extremely important for the large energy customers. They are moving to a greener business and must meet national requirements. Therefore, we're proud to offer a product that meets the highest certification standards," says Moore.

Tiago Thomaz, Senior Biomass Trade Originator in Statkraft, believes the focus on customers comes completely naturally.

"We are a small team, and several of us have previously run our own businesses. It's in our nature to put ourselves in the customer's shoes. It's not just a matter of understanding what customers need right now, but what they will need tomorrow. We must be innovative and a step ahead to remain competitive in the market. Norway isn't exactly known as a low-cost country for industrial production," says Thomaz.

Ship ahoy

Twenty-two hours after the cargo ship Wilson Nice left Tofte, a dot appears on the horizon in the fjord outside Skærbæk. Two cranes with giant claws are ready to lift the wood chips into a large hopper that sucks dust out of the biomass before it ends up on the conveyor belt. The wood chips are then checked for metal residues with a powerful magnet and are tested for size and moisture levels before being sent to the open warehouse that can hold 80,000 cubic metres of chips, which is enough for ten days' production. ­

Many of the employees at Skærbæk power plant have never worked with biomass before. Statkraft's customer contact, Søren Sripathy, was one of them.

"Previously I worked on selling ash for the production of cement, concrete and asphalt. I'm happy to work with biomass, it's part of the future. It's exciting to participate in the transition from coal and gas to biomass. It gives me a feeling of being part of something bigger," he concludes.

Text: Jenny Bull Tuhus
Photo: Ivar Kvaal
The article is based on visits to Tofte, Norway, and Skærbæk, Denmark, in September 2017.

"We're proud to offer a biomass product that meets the highest certification standards."