Statkraft’s first bioenergy production platform ‘firing up’ since Winter 2016

Tofte terminal (Norway): Statkraft’s first bioenergy production platform ‘firing up’ since Winter 2016.

Statkraft’s biomass trading team continues to expand the premium-quality supply of wood chips from Tofte, packaged with bankable, long-term risk absorbing commodity contracts with customer friendly flexibility. We caught up with the teams involved for the following update.

Market Update:

The last 10 years of European biomass trading can be characterized as a period of agri-bulk cofiring at large, utility-scale coal fired power stations. This was followed by complete replacement of the coal fuel systems with wood pellets (imported mainly from the USA). But recently, the Scandinavian fuel market has witnessed a surge by utilities to convert their coastal boilers to wood chips.

These expanding markets have established new demand for wood chip that is distinctly different to traditional sawmill residues as used within the pulp and paper market.

In response to this, Statkraft takes roundwood logs from Norway’s world-class forests, and stores, dries, chips, & blends at its Tofte site in southern Norway. By focusing on optimization and control of moisture content, chip particle size, energy content, and ash properties, Statkraft believes it is supplying a new segment of “energy chip” – fuel matched with individual customers’ needs.

But the new package being offered by Statkraft is much broader than the physical chips themselves. Key features of Statkraft’s offering include:

  • World-class sustainability. Statkraft’s trading desk has been FSC, PEFC and En Plus certified since 2013. Statkraft’s wood chip production will be SBP certified during October 2016. (Statkraft wood chip reduces GHG by 90%)[i]. (Statkraft was recently appointed as the wood chip industry representative on the SBP Stakeholder Committee).
  • Long Term contracts, designed for bank (project) financing
  • Fixed or floating pricing, with indexation to underlying commodity risks, or power, renewable certificates etc.
  • Ability to de-risk FX, long term freight, and Bunker oil for customer projects.
  • Ability to incorporate derivatives and options structures, giving volume and price flexibility to the customer.
  • Ability to offer volume flexibility (including boiler commissioning), coupled to Statkraft’s weather expertise.
  • Energy expertise – as an owner operator of boilers, Statkraft understands the design and the impact of fuel on ash, emissions, and can incorporate different types of fuel to improve blend fuel cost over time (lower grade chips, agri bulks, etc.)

Site Features of Statkraft’s Site:

Statkraft’s Tofte wood chip production site has inherent features that help Statkraft to provide the new type of energy chips. The 350,000 m2 terminal can store over 100,000 tonnes of roundwood and 50,000 tonnes of woodchips, de-risking the logistical supply chain, and providing “just-in-time” delivery.

The site is dedicated to wood products, ensuring no contamination (unlike most of our competition), is Ice-free, non-tidal, with 5 berths enabling multiple incoming/discharge and outgoing/loading vessels and a large deep water berth for high capacity vessels. The site is strategically located to deliver within 2 days of most major European wood importing harbours, and can load large wood chip carrier (60,000dwt vessel) in less than 72 hours or a coastal vessel (10,000dwt vessel) in less than 12 hours.