Why Finnish Paper Mills Became Electric Utilities

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On my recent tour of Finnish greentech, I found that a simple law on the books for decades helps account for the incredibly low carbon footprint of Finns, who look just as energy-intensive as Americans, but register at half our weight on this fragile planet.

Finns get almost one third of their electricity second-hand, after industrial users have had first dibs at it.  Vesa Koivisto of Fortum (the largest utility in Finland) told me that paper mills actually supply about one third of the electricity on the grid. Why?

Heavy industries are allowed to produce and sell electricity, any way they can make it.


Since heavy industry processes create heat as a byproduct, this has led to real incentives for Finland’s paper mills to also become electric utilities, through capturing the heat in their process, and selling the power, for income on the side. Finland leads the world in the use of combined heat & power (CHP) systems, which have been widely used there since the 1960s.

This stupendously easy and effective piece of climate legislation is something even we could pass, even here in the hopelessly plutocratic remains of our poor democracy.

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Heat is the old fashioned way to make electricity: boil water = make steam = drive turbine. Many industrial processes create enough heat to provide the potential for a steam-driven power plant on-site. In the US, paper mills do use this to supply about half their own energy needs, but the potential energy savings have not improved since the early 1990s. In Finland, because of the law that encourages it, they recycle that energy and actually sell their surplus.

As a result, Europe as a whole now generates 11% of its electricity using CHP, driven mostly by Finland, Denmark and the Netherlands.

Heavy industries are simply allowed to produce and sell electricity, any way they can make it.  I see no real impediment to passing a law like that in this country, even. CHP companies in the US,  like RED are ready. I’d like to see Rush petrify his millions about  Al Gore’s secret plot to blah blah blah, regarding a law like that, that would provide an income stream for paper mills, cement makers and steel mills (while greatly reducing our carbon footprint).

Instead of using all their energy resisting climate legislation, like fossil energy companies, heavy industry companies simply get to make money solving it. Clever law.

But first, we’d need to change another law. Utilities in Finland, even giants like Fortum, may not prevent others from competing with them in the production of energy. Here,  they can.

Susan Kraemer @Twitter

Image: Pablo Päster, Treehugger

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