5 September 2022
Swedish Government proposes SEK 250 billion to stabilise the energy market
Sweden’s Government wants to guarantee the liquidity of the electricity producers to prevent the problems of the electricity markets from spreading throughout the financial sector. The Prime Minister, Magdalena Andersson (S), said that the Government was acting resolutely to prevent a broader financial crisis. Flanked by the Governor of the Riksbank, the Director General of the Financial Supervisory Authority, and the Minister for Finance, the PM said that President Putin’s decision to cut off all gas deliveries via NordStream 1 will raise electricity prices in Germany, which in turn will also raise energy prices in Sweden. The collateral requirements for companies trading on Nasdaq’s Nordic clearinghouse recently hit SEK 180 billion (USD 16.5 billion), up from around SEK 25 billion in normal times. (A more in-depth update from Mundus on the developing situation can be found here)
Andersson said that the Government was stepping in to avert a more general financial crisis, which could lead to Swedish households seeing their pensions lose value, companies go bankrupt and increase unemployment. Given the urgency the Riksdag Speaker recalled the Riksdag to meet today to debate and address the problem with the aim of adopting a financial support plan along the lines suggested by the Government. The Government's proposal was adopted by the Riksdag on Monday afternoon.
Finland also steps in to ease energy crisis by avoiding Lehman-like situation for power companies
Finland also announced a plan to provide billions of Euros in liquidity guarantees to its power companies, providing EUR 10 billion in liquidity guarantees. The Finnish Prime Minister Sanna Marin said the Government's plan was a last resort financing option for companies that might otherwise be threatened with bankruptcy. Measures were needed at EU level to stabilise the functioning of the derivatives market and the energy market in general. The Finland Government said the guarantees were designed to prevent ballooning collateral requirements from toppling energy companies trading electricity on the Nasdaq commodities exchange, a situation that could in turn spill over into the financial sector.
Energi Norge said that it believed that the Norwegian Government should follow the example of Sweden and Finland and provide a national guarantee if necessary to prevent a collapse of the electricity market. Nordea's chief analyst Thina Margrethe Saltvedt said that there is a lot of uncertainty in the market, comparable to the financial crisis of 2008.
Sweden and Norway want to strengthen Nordic power cooperation
The Minister for Energy and Digital Development, Khashayar Farmanbar (S), and Norway's Minister of Petroleum and Energy, Terje Aasland, met on 5 September to discuss the major challenges in the electricity market with high and volatile prices. Sweden and Norway want to promote stronger electricity cooperation and will quickly set up a "working group" to urgently investigate what can be done to reduce high electricity prices. Denmark and Finland will be invited to participate in this work from the outset. The working group will also follow the ongoing discussions within the EU and any new proposals from the European Commission on the design of the electricity market, and make recommendations well in advance of the Nordic Energy Ministers' meeting in Oslo on 28 November.
Anaergia signs agreement with European Energy
Anaergia has signed an agreement with European Energy. Under the terms of the agreement, Anaergia will supply European Energy with up to 60,000 tonnes of liquefied bio-sourced carbon dioxide per year for 10 years. Biogenic carbon dioxide is the carbon dioxide released during the decomposition of organic matter, such as food waste. All Anaergia plants use organic waste to produce biogas, which consists of methane and carbon dioxide. Once this gas has been processed, Anaergia produces pipeline quality renewable natural gas and a clean stream of carbon dioxide, which is normally released into the atmosphere from which it originally came. Biological carbon dioxide from organic material is considered an ideal raw material for low carbon fuels as its use does not add new carbon to our atmosphere. Anaergia will supply liquefied carbon dioxide from an anaerobic digester which will operate at its plant in Tønder, Denmark. As a result of this agreement with European Energy, Anaergia will build a state-of-the-art CO2 liquefaction system at the plant.
Copenhagen Energy offers Denmark massive wind expansion opportunity
The Danish Government has signalled that it wants to significantly increase the development of offshore wind power and has also decided to become Europe's green power plant to harness the full potential of Danish offshore wind power. Copenhagen Energy has now announced that it is ready to help the Danish Parliament achieve this ambition and has therefore proposed to build a further 2 GW of offshore wind power as early as 2027. Copenhagen Energy is proposing to build the 2,250 MW Odin offshore wind farm in the North Sea, more than 100 km west of Hanstholm, in an area where rules allow the expansion of offshore wind to be supplemented by government tenders through a so-called open door scheme. Although the open door scheme has been criticised for, among other things, not requiring payments to the state, Green Power Denmark proposes to deploy offshore wind energy through a two-pronged strategy in which government tenders are complemented by market-driven deployment through a modernised open plan to ensure that green energy is deployed at the highest possible rate. With the Odin project, Copenhagen Energy hopes to turn the scepticism of the government and parliamentary parties into enthusiasm, demonstrating that market-driven expansion through an open-door scheme can give society faster access to more green energy.
Neptune Energy and Horisont Energi to collaborate on Errai CCS project in Norway
Horisont Energi and Neptune Energy have announced the signing of a Memorandum of Understanding (MoU) to develop the Errai Carbon Capture and Storage (CCS) project in Norway. Errai has the capacity to store 4-8 million tonnes of CO2 per year, with the potential to store more at a later stage. The project includes an onshore terminal for intermediate CO2 storage, which is intended to store CO2 permanently in an offshore reservoir. The onshore terminal will be able to receive CO2 from European and domestic customers, including from the planned CO2 terminal in the Port of Rotterdam. Neptune Energy brings subsurface expertise and extensive carbon capture and storage experience to the project, having re-injected CO2 into the K12-B field in the Dutch North Sea for the past 14 years and being a partner in the Snøhvit field in Norway, which has been in operation since 2008.
VTT launches Olefy to revolutionise recycled plastics recycling
After four decades of thermal conversion technology development, VTT will launch Olefy technology in October, a process that can economically convert an unlimited number of the world's plastic waste into usable virgin grade materials. VTT also announced 8 patent applications for the process and has announced plans to spin off a new company, Olefy Technologies. Its patent-pending technology can extract over 70% of virgin plastic and chemical raw material content from plastic waste. The new process can be done in one step, significantly reducing the cost of plastics recycling and making recycling the preferred option for the large volumes of landfill plastic waste that cannot be processed by current methods. A key advantage of the virgin quality material produced by the Olefy process is that it allows the plastic to be recycled an unlimited number of times. The quality of the plastic is the same as the virgin grade, so it can be recycled indefinitely and no longer needs to go into landfill. VTT CEO Antti Vasara says plastic waste is one of five major global issues that VTT is addressing strategically. Olefy is therefore a giant leap forward in recycling that will change the way the world looks at plastic, making it truly circular and leading to faster carbon neutrality.
European Energy completes the construction of Pomerania wind portfolio in Poland
European Energy has completed the construction of the Pomeranian wind project in north-western Poland, which consists of five wind projects with a total capacity of 44.7 MW. With this combined grid connection, European Energy's total wind power capacity in Poland is 59.7 MW. Construction of the 18-turbine wind farm, with a total investment of EUR 73 million began in 2019. The Pomeranian wind portfolio is expected to generate an average of around 145 GWh per year, provide renewable energy to 70,000 households in the region and contribute to the state and local budgets through tax revenues over the 30-year operating period.
Northern Sweden’s electricity prices have also increased significantly
Until now, the rest of Sweden has looked on jealously at the prices paid for electricity by northerners. However, according to the Nordpool Electricity Exchange, the price of electricity in Norrland rose to SEK 2 per kWh on 5 September. This is more than four times the rate of the previous Friday 2 September, when electricity in the same area cost SEK 0.46. Ulf Larsson, manager of Jämtkraft's electricity trading department, said the increase was due to the fact that there was very little wind power.
Svalbard's 'green shift' postponed: coal mines still won't close
The global situation has led to increased demand and higher prices for coal. As a result, Store Norske has extended the operation of Mine 7 until the summer of 2025, putting the green shift in Svalbard on hold. The Industry Minister Jan Christian Vestre, who represents the state as owner, confirmed that the Government has now found out that actively producing coal in 2022 is not a bad idea.
What we're reading
- Gas prices soar 26% after Russia keeps key pipeline closed (BBC)
- Germany announces €65bn package to curb soaring energy costs (BBC)
- Strains mount in European power market as UK generators call for help (Financial Times)
- Some G20 nations "backsliding" on climate targets, says UK envoy (Reuters)
About Nordic Green News
The Nordic countries are some of the most dynamic and successful economies in the world. They are also leaders in sustainability, from renewable energy, biofuels, carbon capture and storage and the hydrogen economy, circular economy business models and battery development, the Nordics are pioneers in policy design, technology development and consumer uptake. Mundus Nordic Green News is covering this transition for the international community. Every day we curate the stories of most relevance to international businesspeople and policy experts from the flow of news. Mundus Nordic Green Indices summarise the meta-data from our daily coverage to enable easy tracking of trends. We supplement these with our own opinion pieces and commentary.
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