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Partners for the green shift: Neste and Statkraft on their PPA

13 Sep, 2021

Statkraft just signed a PPA-contract with Neste in Finland, the world’s largest producer of renewable diesel and sustainable aviation fuel and a technologically advanced refiner of high-quality oil products. The heavy industry, energy intensive as their production is, faces unique challenges when it comes to a sustainable power supply. We have talked to Frode Berntsen of Statkraft and Sami Oja, Act. Business Lead, Oil Products of Neste, about their partnership.

The heavy industry, energy intensive as their production is, faces unique challenges when it comes to a sustainable power supply. We have talked to Frode Berntsen of Statkraft and Sami Oja of Neste about the recent closing of their wind PPA in Finland and their partnership.

Statkraft supports Neste Finland in achieving another milestone in going renewable. Frode, what does the PPA contract entail?

Frode Berntsen: "Our power purchase agreement with Neste is a contract for the delivery of wind power from Finland over the course of ten years. Delivery to Neste's Porvoo refinery will start in 2022. We supply 215 GWh per year, thus supporting Neste in reducing 53.000 tons CO2 equivalent* annually. The electricity originates from the Mastokangas wind farm, currently under construction in the municipalities Raahe and Siikajoki, for which Statkraft has signed a power purchase agreement with Aquila Capital, the owner of the project."
(*Scope 2 emissions defined by the Greenhouse Gas Protocol)

How much nearer will the PPA with Statkraft bring Neste to reaching your goals?

Sami Oja: "Neste has set an ambitious climate commitment to reach carbon neutral production by 2035, and our aim is to use 100 percent renewable electricity globally by 2023. As renewable wind power is one of the key measures to reduce greenhouse gas emissions of our production, our partnership with Statkraft is an important milestone in our climate work.

We have been using wind power at our refinery in Porvoo, Finland, since the beginning of 2021. The total annual capacity of our agreement with Statkraft will correspond to some 18 percent of the electricity consumption at the Porvoo refinery. Every PPA is a concrete step towards our target."

Neste's refinery in Provoo, Finland
Neste's refinery in Porvoo, Finland (Image: Neste)

What is special about the partnership with Neste?

Frode Berntsen: "Becoming part of Neste’s journey in reducing their carbon footprint has been a real boost for us. Over the last years, we have increased our activities in Finland, and so far, in 2021 we have entered into three PPAs.

Working with Neste was a really professional process with many discussions on how to fulfil the requirements on both sides. There is no one-size-fits-all-answer in the renewable energy world, and we are really happy that we found solutions that could be tailored to Neste’s demand and also meet their expectations in terms of risk appetite and commercial parameters."

"Our aim is to use 100 percent renewable electricity globally by 2023. We are increasing the use of renewable wind power at the Porvoo refinery, as it is one of the key measures to reduce greenhouse gas emissions of our production."
Sami Oja
Act. Business Lead, Oil Products, Neste

What gives Statkraft the expertise to tailor PPAs to customers’ needs and demands?  

Frode Berntsen: "Experience! Statkraft has for many decades been a leading provider of PPAs to Norwegian industry. Renewable energy is our backbone and we have a good knowledge and relations to large energy consumers in the Nordic countries. We also have a highly competent origination department active across the Nordic market with a strong desire to take an active part in the green shift – where renewable is not only part of the solution, it is the solution."

And how exactly does Statkraft take an active part in the green shift through PPAs?

Frode Berntsen: We see that needs and requirements from renewable energy project developers and off-takers such as Neste are not always a perfect match: Companies have their goal to fulfil sustainability targets, to reduce carbon footprints or, in this case, also to support new renewable production coming to the grid. On top, they understandably want to purchase renewable power at a competitive price.

On the other hand, we have the goals of developers or investors: They are looking for bankable counterparties with whom they can secure a long-term stable cash-flow as well as de-risk from other exposures that do not fit into their project portfolio.

Between these very different demands, Statkraft has an important role: That is, to absorb risks and offer solutions that are both administratively and commercially attractive to both parties. By doing our job right, we contribute to more companies being able to enter a PPA and more renewable projects being realized.

Do you see this the same way, and do you feel well-supported by Statkraft on your journey?

Sami Oja: "We partner with trustworthy professionals, who have a strong desire to make a sustainable difference. Statkraft is definitely one of those companies and we are happy to start a partnership in the field of renewable electricity. Statkraft can meet our requirements from finding the right Finnish wind power projects and for its risk management, price stability and security of supply. Neste and Statkraft are both large players in the energy market, and the establishment of a solid partnership fully supports Neste’s goals and ambitions."

"As a major partner to industry customers, we believe that our solutions should fit our customer’s needs. We enable them to achieve their sustainability targets while matching their procurement goals with competitive pricing and adequate risk management."
Frode Berntsen
Head of Industry Nordics and Baltics at Statkraft

And what does the future hold?

Frode Berntsen: "We are very proud to contribute to Neste’s objectives with renewable energy from a Finnish wind farm. In the future, we want to grow our business in Finland and the Nordics further and for this, we are continuously developing new products and solutions that fit the purpose of our customers.

We not only have the largest renewable asset fleet in Europe at our fingertips, we are cooperating with project owners and developers. Projects like this lead to amazing innovations, for example in the sphere of 24/7 solutions and innovations on the Guarantees of Origin side. We want to be a central part of this development that is needed and must happen."

Frode Berntsen
Head of Industry Nordics and Baltics


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