SIEMENS

The King of Sweden expressed his pride when the Igelsta biomass power plant entered service in Södertälje, west of Stockholm in March 2010. “The time has never been better for an investment like this,” stated Carl XVI Gustaf. “The plant we have built sets an example for Sweden, for Europe and for the whole world.” Compared with a conventional power plant fired by fossil fuels, the new biomass facility saves as much carbon dioxide as is emitted by 140,000 cars per year.

To promote green energies, the Swedish government decided in favor of the “carrot and stick” approach years ago. Economic incentives for renewable energies and financial sanctions for conventional technologies make the construction of new coal-fired power plants unprofitable. Swedish utilities reacted quickly by investing in power plants that burn biomass or waste instead of fossil fuels.

Sweden's targets are ambitious. By 2020, fossil fuels are to be eliminated from electricity generation. But nature is helping here. Hydro power already covers nearly half of Sweden's electricity needs; nuclear power provides a significant share; and two percent was generated by wind turbines in 2009. More than eleven percent is generated in combined heat and power plants (CHP) and this proportion is expected to rise to 15 percent by 2015. Waste heat is used in industrial processes or fed into district heating systems. Particularly in cooler therregions, the overall efficiency of this technology is unbeatable (Pictures of the Future, Spring 2010, page 32). Like Igelsta, more and more of these plants are using biomass as a fuel.

Mats Strömberg, the project manager responsible for the development of the power plant at power company Söderenergi, had already worked on a similar project in Gävle, north of Stockholm. As in Södertälje, a Siemens SST-800 steam turbine is in use there. Three quarters of the fuel for Igelsta consists of biomass, mainly residual products from forest clearing; the other quarter consists of recovered waste materials from offices, shops, and industry. From this fuel mix, the plant produces 200 megawatts (MW) of heat and 85 MW of electricity. “Siemens simply made the best offer in both Gävle and Igelsta — the price, performance and technology were all right,” says Strömberg. “Performance is the key aspect, because the power plant is designed to operate for 40 years. Our efficiency gains over that period will be enormous.”

Payment Required. In 2003, a system of trading in green certificates was introduced in Sweden, promoting the use of renewable energies and making fossil fuels more expensive. “These certificates are just one of the regulatory measures applied to the energy mix,” says Jan-Erik Haglund, environmental manager at Söderenergi. “A carbon tax and the consistent application of the pan-European emissiontrading system are the other mechanisms.”

This means that users of fossil fuels are subject to three different disincentives in Sweden. The Swedish carbon tax was introduced in 1991 and currently adds about 50 percent to the cost of each kilowatt of energy produced with fossil fuels. And when the EU-wide emission trading system was introduced, the carbon allowances allocated to electricity producers covered only some 70 percent of their requirements; they had to buy the rest.

Since 2003, in parallel with these restrictions, Sweden's national electricity certificate system has also been in force. Such certificates are allocated for free to producers that use renewable energies (one certificate for each MWh produced). All suppliers of electricity must acquire such certificates in line with their total sales of electricity. The quota is set by the state and increases over time; for 2010 it is 17.9 percent. The certificates are freely traded; their prices rise as demand increases.

In this way, the “invisible hand” of the market is used to promote those types of green energy that can be produced most economically. But not all emission-free technologies are part of the national certificate system. Nuclear power and existing large hydroelectric plants are excluded, for example. Haglund sees this state regulation in Sweden as a model to be emulated. “The state stepped in and removed an assumed market dysfunction, the relative underpricing of fossil fuels. The results speak for themselves. Without this system, Igelsta would most likely have been designed to burn gas rather than wood waste,” he explains.

With their enthusiasm for biomass, the Swedes are both pioneers and traditionalists. During excavation for the Igelsta power plant's foundations, workers found a Stone Age fireplace. To keep themselves warm, the people of Södertälje are burning wood just as their ancestors did thousands of years ago. But thanks to the latest technology, they are doing it extremely efficiently.