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Fortum Varme to Make Investment in New Biofueled CHP Plant in Sweden

Fortum Varme, Fortum's subsidiary co-owned together with the City of Stockholm, has decided to invest in a new biofuelled combined heat and power (CHP) plant in Vartan, Stockholm.

The value of the investment is approximately EUR 500 million and it is included in Fortum's current capital expenditure guidance. The new plant will replace some of the existing heat production with the less expensive biofuel alternative as well as increase Fortum Varme's total electricity production by approximately one third. The construction of the plant will start immediately and it is planned to be commissioned in 2016.

Fortum Varme supplies Stockholm with heat and electricity. Annually Varme currently supplies approximately 8,300 gigawatt-hours (GWh) heat, 400 GWh district cooling and 1,500 GWh electricity. The new CHP plant will have a production capacity of 280 megawatts (MW) heat and 130 MW electricity. The annual production of the plant is estimated to be approximately 1,700 GWh heat and 750 GWh electricity. The heat production equals the annual heat consumption of about 190,000 middle-sized Swedish households.

The new CHP plant will be connected to Stockholm's Southern-central district heating network. The advanced boiler technique will allow Fortum to use a full range of solid biofuels and reduce the use of fossil fuels significantly. The new plant will use forest biomass as fuel. The use of bioenergy at Värtan will increase to as high as 70% from today’s 45%. The investment meets Fortum's profitability and strategic criteria well, as it will enable the company to use cheaper and more sustainable fuels.

"District heating has a strong position in Stockholm. With the new investment, we will strenghten the energy production of the area. The investment is also in line with Fortum's strategy, where CHP-production plays a central role. CHP technology improves resource efficiency since it enables as much as 90% of the energy content of the fuel to be utilised. The direct and indirect environmental benefits of the new biofuel-based plant will be significant. The global CO2 emissions will decrease by 650,000 tons annually", says Anders Egelrud, Managing Director of Fortum Värme - Fortum's heat business in Sweden.

Fortum's goal is to achieve climate neutral production of district heating in Stockholm. In addition to Vartan's new plant, Fortum is currently constructing a new waste-fired unit at the Brista CHP-plant in northern Stockholm, Sweden. The new Brista unit is estimated to be commissioned in 2013.


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