Södra And Statkraft In Renewables Alliance

Swedish forestry and timber product company Södra and Norwegian energy company Statkraft have signed a renewable energy agreement of intent valued at up to SEK 10 billion (€1 billion) and covering a range of technologies.

As part of the deal, Statkraft will become a major partner for Södra through the establishment of a new jointly-owned business for the long-term development and expansion of wind power on Södra’s properties. The investments are to be made in Södra’s existing wind power company, Södra Vindkraft AB, in which Statkraft is acquiring a 90% holding. Overall, this comprises a project portfolio with a potential of some 300 wind power installations, corresponding to an annual production of 1.6 TWh, with the option of further expansion.

An agreement of intent has also been signed with the aim of constructing one of Western Sweden’s largest infrastructure projects in the form of the country’s longest waste heat pipe from Södra Cell’s plant at Väröbacka to Kungsbacka and Statkraft’s district heating grid. Initially, the project will involve Värö supplying the equivalent of 135 GWh per year of power.

At the same time, the partners have signed an agreement for the supply of biofuel from Södra to Statkraft’s district heating plants in Sweden.

A decision in principle has also been taken concerning electricity supplies, energy servicing and load balancing from Statkraft to all of Södra’s works in Norway, including the paper pulp companies of Södra Cell Tofte AS in Tofte and Södra Cell Folla AS at Follafoss and all of the Gapro wood-products units in Norway.

The agreement is expected to be definitively signed in the fourth quarter of 2009.

“This is a partnership which will allow us to proceed even more quickly with the development of the renewable energy solutions that consumers are calling for. It covers the expansion of wind power activities and supplies of district heating, biofuels and electricity. Through a wide-ranging collaboration with Europe’s largest producer of sustainably generated power, Södra gains a partner who has the same ambitions as we have”, said Leif Brodén, president and CEO of Södra.

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