We are experiencing an unprecedented context regarding energy. What does this mean for Holmen’s operations?
Holmen's business is built around the forest ecocycle and the renewable products we can create from it. Holmen has five business areas where especially our paper products division is a high consumer of electricity.With our own renewable energy production from hydro and wind we have an annual production of 1.7 TWh.
Together with the renewable electrical energy that is produced at the Groups mills, this equates to approximately 50 per cent of Holmen’s overall energy consumption. Our energy production and consumption are not on equal levels, but there is significant opportunity in this regard.
How is hydro and wind distributed across your portfolio?
Most hydro capabilities are located in Northern Sweden, whereas our paper mills, which are high consumers of electricity, are in the South. We do not have the capacity to bring electricity from the North to the South, and this creates the hurdle of energy pricing differences across Sweden, and even more if you are looking to Germany and the rest of Europe.
We produce energy from wind and water on our forest lands, with approximately 70% of our 21 hydro power plants in Sweden being co-owned. We built our first wind farm in 2013 and earlier this year the Blåbergsliden Wind Farm was completed. As a large landowner we have an opportunity to expand wind power within Holmen, however, a major challenge is the permitting process which is difficult and tedious and can sometimes take up to 5-10 years.
Can you speak to the government policies regarding renewable energy in Sweden?
Renewable energy policy can be much more supportive, and the government has to invest in the national grid to enable transmission capacity and connection of more wind, solar, and renewable power.
Permitting remains a challenge and should be more efficient to allow for the development of more renewable energy projects. More people should be employed to handle the volume of applications. The environmental law in Sweden is also quite stringent and can significantly slow down the process of developing a project.
Is finding skilled labor within the renewable energy sector a challenge?
Many experts in the hydropower sector, which were mainly developed in the 50s and 60s, are now approaching retirement age. Training efforts in the industry have not been as great since then and there is not a new generation of talent in the way we wish. The wind and solar power sectors in Sweden, on the other hand, are relatively new, here the problem of finding experienced people is a big challenge.
How has Holmen navigated the global supply chain challenges experienced over the past couple of years?
Holmen started construction of the 26 turbine Blåbergsliden Wind Farm outside Skellefteå in northern Sweden in January 2020. COVID hit three months later, and despite challenges with employee health and travel restrictions, we still managed to progress the project in budget and all within the time schedule set from the start. Although supply chain disruptions were not as prevalent on our Blåbergsliden project, it is possible we will even see delays within the industry.
What are Holmen’s main growth objectives for the next five years?
Having control over raw materials such as wood and energy is the backbone of Holmen’s business. With the trend towards electrification, demands for renewable energy generation are significantly increasing, creating a great opportunity for Holmen to develop renewable energy projects.
Holmen has the land, experience, knowledge, and opportunity to bring more renewable energy into production. Looking at demand forecasts, it is a no-brainer to continue developing renewable energy projects and a much-needed strengthening of the energy infrastructure - building up the grid and speeding up the permitting process.
With regards to the green transition, do you believe that we will reach the targets set by the EU in time?
I believe we will see significantly more renewable energy generation capacity being installed over the next few years, but the slow permitting process will be a great hurdle to achieving our goals. Nearing a recession will also impact much needed investments to develop renewable energy production. Although a lot still needs to be done to reach our goals, Sweden is one of the leaders when it comes to the green transition, and I remain optimistic about the way forward.
