KUHMO: the perfect example of local bioenergy production

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2 Kajaani University Consortium CEMIS-Oulu KUHMO: the perfect example of local bioenergy production Background Much more wood energy must be used in the near future to help meet the target of increasing the share of renewable energy in national energy consumption to 38% in Finland by The aim of the national climate and energy strategy is to triple the amount of energy generated currently from wood chips by As the statistical data (Fig. 1) indicates, Kainuu is one of the forerunner regions in the use of wood energy in Finland and the EU. This is based on excellent wood energy knowledge and production (in harvesting, logistics and production). The consumption of primary energy in the Kainuu region was 4.7 TWh and no less than 62% was based on renewable energy resources. Up-tothe-minute statistical data shows that 32% of primary energy consumption in the Kainuu region was based on solid wood based fuels. It has been estimated that in the municipality of Kuhmo the share of renewable energy is the highest in the Kainuu region. Wood directly or indirectly accounts for as much as one third of the total energy used in the Kainuu region. The largest users of wood energy are companies and district heating plants and power stations, which produce large quantities of energy from residual wood such as bark, sawdust and forest chips. The Kainuu region does not have pulp or paper making processes producing black liquor, which is a typical fuel in some wood industrial regions in Finland. Motor fuel oil 7% Renewable electricity 26 % Traffic 15% Peat 9% Heating oil 6% Other renewables 2% Heat pumps 2% Wood energy 32% Figure 1. The share of primary energy consumption in the Kainuu region in 2012.

3 Kainuu is a very sparsely populated region with an area of 24,453 km 2 and population of 80,100. It has extensive forest energy resources. The forested area is more than two million hectares. The sustainable cutting plan in the Kainuu region is 4.7 million m 3 /a. Only one million m 3 is processed in the region and half of the whole potential remains unused. Refining high quality fuels from local energy resources offers great potential for the development of the region. From 2008 to 2010 Kuhmo Lämpö Oy and Kuhmo Oy invested a total of 15 million euros in a new boiler, combustion gas heat recovery system, belt dryer and briquetting lines. A subsidy from the Ministry of Economy and Employment covered 25% of the cost of the combustion gas heat recovery system. City of Kuhmo Kuhmo is a city of 9,200 inhabitants on the eastern border of Kainuu, Finland and the European Union. It lies 100 km from Kajaani and 65 km from the Russian border checkpoint Vartius. An ecologically sustainable economy is respected in Kuhmo. The wood processing development network Woodpolis is in charge of the commercialisation process of wood construction within an international network. The forests of Kuhmo as well in Kainuu as a whole, have been certified. District heating in Kuhmo Like many other municipalities in Finland, Kuhmo utilizes a district heating network in the city center. The total length of the district heating network is 28 km. The majority of buildings in the center of Kuhmo are connected to the district heating network. The total volume of buildings with district heating is more than m3 including municipal (town hall, school, etc.) and privately owned buildings and residences. Insulated heating pipelines are situated under the streets. Kuhmo city buys district heat energy from Kuhmon Lämpö Oy and distributes it to private customers. The amount of customers is 490. The pipeline network is owned by Kuhmo city. Each customer has a heat exchanger and energy consumption is measured according to customer use. The price of district heat energy is only 63 /MWh and it is the lowest in Kainuu (see fig 2.).

4 Figure 2. The price of district heat in municipalities in Kainuu Close co-operation between the local sawmill and energy company The energy company and sawmill cooperate extensively and they are situated on the same site. Their location boasts some advantages (e.g. no fuel transport costs). Kuhmo Oy (sawmill) founded in 1955, is the largest forestry company in Kainuu and it is privately owned. The company is a timber expert, using the latest sawing technology. It provides employment for 135 people. Kuhmo Oy sawmill uses the two main tree species of the local forests; pine 80% and spruce 20%. The main suppliers are state forests and local private forest owners. Kuhmo Oy is often the sole buyer for many forest owners as it can use up to 90% of commercially harvested round wood. This is enabled by an investment into sawing equipment capable of handling small sized round wood coming from thinning operations and the tops of trees. The timber comes from the forests of Kainuu and it is distributed under the trademark URSUS, which is Latin for bear. Kuhmon Lämpö Oy (Energy Company) is owned by the municipality of Kuhmo (51%) and Kuhmo Oy (49%). Kuhmon Lämpö Oy produces energy for Kuhmo Oy, district heat for the municipality of Kuhmo and electricity for the national grid. Kuhmon Lämpö Oy has three boilers with an efficiency of 18, 12 and 10 MW. 246 GWh of wood-based fuel is used. The use of heavy oil was only 0.7 GWh. Fuel handling employs three employees around the clock. The 18 MW-boiler is a combined heat and power unit (CHP). The newest boiler (10 MW) has a combustion gas recovery unit.

5 Table 1. The use of fuels in Kuhmon Lämpö Oy Year Heavy fuel oil Light fuel oil Wood based fuels Total Renewable energy The share of renewable energy GWh pa GWh pa GWh pa GWh pa GWh pa % , , , , ,8 The efficiency of the combustion recovery unit is 3.2. MW when the boiler is operated at maximum efficiency. The boilers burn moist bark and saw dust and it is also possible to mix them with dryer fuel if problems occur. The drying unit is a typical belt dryer where hot air is drawn through the moist saw dust bed from the top down. The thickness of the sawdust bed is 17 cm. The speed of the belt varies according to the target sawdust moisture content. The process aims to achieve 11% moisture content. The humidity of the fuel varies from 50% to 60%. This is very typical of sawmill by-products which are mainly bark and sawdust when the raw wood is processed before drying. The boilers in Kuhmon Lämpö Oy are able to use moist wood fuels of this kind. The humidity of the wood fuels is measured using on-line measuring equipment which is based on the microwave system (Senfit Oy). The local energy system concept is shown in fig. 3. Kuhmo Oy produces some loose m 3 of different kinds of by-products when processing m3 small diameter round wood. The byproducts are sawdust, bark and the residue from timber trimming. After drying, the sawdust is formed into wood briquettes (capacity 30,000 t/a) and the rest is used as fuel in the boilers of Kuhmon Lämpö Oy. Most of the wood briquette users are located within 200 km of Kuhmo. Bark and some of the sawdust is sold to Kuhmon Lämpö Oy and used as boiler fuel. The dry residue from trimming the timber is mainly sold out for use as a fuel in local smaller boilers.

6 Sale of energy District heat for the municipality of Kuhmo network 62 GWh/a Heat energy to Kuhmo Oy 123 GWh/a (including drying energy for 9 progressive and 20 chamber kilns) Electricity for Kuhmo Oy or the national grid 24 GWh/a Technological approach Figure 3. The energy system concept in Kuhmo. Combustion technology: o 18 MW CHP-unit by Ahlströn using Pyroflow technology, MW Heat energy 5 MW Electricity o 12 MW Rotating grate by Sermet, 2001 o 10 MW Grate boiler by URBAS, MW combustion gas heat recovery Four briquetting lines by Nielsen, 2009 Investment (boiler & saw gas condenser) 5.4 M

7 Recycling pure wood ash In 2006, Kuhmon Lämpö Oy initiated the recycling of pure wood ash. Ever since, wood ash has been recycled and used as a nutrient in local peat-land forests. Annually, the company produces some 1000 tonnes of pure wood ash which is stabilized and dispersed with a dispersal unit attached to a forest forwarder. This amount of fertilizer is enough for 140 hectares of forest land. Kuhmon Lämpö Oy uses the self-stabilization method. The ash is used to replace virgin raw materials. The target humidity content of ash is 30% in order to achieve optimal stabilization. The mixing ratio of fly ash and grate ash is 1:1 to achieve the correct mixture. The quantity of the mixture needed for fertilising the forest is calculated using the data from ash and needle analysis. On average, the amount of ash spread is four tonnes (TS) per hectare. Stabilization is carried out by carefully mixing flue and grate ash and then clamping the mixture for some months in an asphalt field. Kuhmon Lämpö Oy reports to the Finnish Food Safety Authority EVIRA on the utilization of ash mentioned above. The ash replaces conventional chemical fertilisers used to fertilise forests. In this way nutrients are returned to the forest. In Kuhmo, there are also other wood processing companies which buy timber from Kuhmo Oy and refine it to produce high quality timber such as panels, e.g. AA-puu Oy. This company produces a lot of cutter shavings, the raw material for M-Pelletti Oy. M-Pelletti makes wood pellets from this raw material. The company has two pellet presses and its annual pellet capacity is tonnes. Nowadays the company also has a small capacity briquetting machine. M-Pelletti Oy provides employment for three people. The pellets are distributed via wholesale businesses. Kuhmo also has some large residential buildings which have outsourced their energy production. Heat production entrepreneurship is one potential energy business sector. The Veljekset Pääkkönen Company is a local heating enterprise which produces heat energy for the Kalevala Rehabilitation Centre (forest chips) and the Kanerva Nursing Home (wood pellets). Conclusion It is very important for remote municipalities such as Kuhmo to conduct very close co-operation with different operators including local companies and the municipal government. Kuhmo Oy is the largest private enterprise providing employment in Kuhmo and therefore its operations are extremely important to the regional economy. Cooperation on energy issues between the City of Kuhmo, Kuhmo Oy and Kuhmon Lämpö Oy has created significant economic benefits. Cheap energy (both thermal energy and electricity) is crucial to export companies such as Kuhmo Oy that operate in global markets. The location of operations has its own electricity distribution network which means that no transmission fee is charged for the electricity sold to Kuhmo Oy by Kuhmon Lämpö Oy. The City of Kuhmo also receives cheap district heating for its own properties and for distribution to private customers.

8 Natural resources and opportunities must be utilized locally in the best possible way. The nearest potential power station outside Kuhmo able to use by-products from Kuhmo Oy is located 100 km away in Kajaani. Recycling wood ash locally also provides an approximate advantage of 100,000/a in comparison to having to transport ash to the nearest municipal refuse site. It is important to use local resources as much as possible and to refine by-products to a higher degree. Local material flows must be connected so that the residue of one company s process can be the raw material for another company. More information Kuhmon Lämpö Oy: Managing Director Markku Piirainen, markku.piirainen@kloy.inet.fi Kuhmo Oy: City of Kuhmo: Regional bioenergy program: Timo Karjalainen, timo.karjalainen@oulu.fi

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