Tuesday July 23, 2024

Fortum, NESA agree to reserve coal power production for backup

Published : 31 Oct 2023, 03:04

Updated : 31 Oct 2023, 03:17

  DF Report
Meri-Pori coal power plan: Photo: Fortum

The Finnish majority state-owned energy company Fortum and the National Emergency Supply Agency, Huoltovarmuuskeskus (NESA) on Monday signed an agreement under which NESA reserves the production of the Meri-Pori coal condensing power plant for severe disruptions and emergencies to guarantee security of supply in the electricity system in Finland.

The agreement will remain valid from 1 March 2024 until 31 December 2026, said Fortum in a press release.

Reserving the possibility for production is a typical measure taken by the NESA to ensure the security of supply.

Over the coming winter months, the Meri-Pori power plant will operate on a commercial basis, to support security of supply in the Nordic power market.

Fortum retains the ownership of the plant and Caverion Industries will be responsible for the plant’s operation and maintenance. The plant employs 40 people, and the agreement is expected to have no impact on personnel.

Fortum’s new strategy focuses on delivering clean energy and driving decarbonisation in industries primarily in the Nordic region. Furthermore, the company has set ambitious environmental targets according to which Fortum will phase out all coal-based power generation by the end of 2027.

“Operating the Meri-Pori plant has not been commercially viable for several years and consequently, it has been in the Finnish peak-load reserve system during 2017-2022. However, we at Fortum are very pleased the plant could support security of supply in Finland during the energy crises last winter, when Olkiluoto 3 was just starting its commercial operations. This agreement reinforces the resilience of the Finnish energy system. Without this agreement, we would have had to take the decision to close down the plant, ” said Simon-Erik Ollus, Executive Vice President of Corporate Customers and Markets of Fortum.

"With Meri-Pori's production reserve, we can respond to the significant changes that have taken place around us regarding security and to prepare for large-scale hybrid threats towards our country. This agreement ensures that there will be significant electricity production capacity available in Finland in the next few years in case of the most serious crises and disturbances. The production reserve will not be used to even out price peaks," said Janne Känkänen, Managing Director of the NESA.

“It is important that Meri-Pori plant will be operational in the market during this winter. After that, keeping the plant operational in case of exceptional situations will help with Finland's security of energy supply," said Director General Riku Huttunen from the Energy Department of the Ministry of Employment and the Economy.

The Meri-Pori plant is located in Tahkoluoto, Pori, and it is Finland’s last coal-fired condensing plant with power generation capacity of 565 MW.

It was commissioned in 1994. When the plant was in the peak-load reserve system, it was used mainly for test runs. Deployment of actual electricity generation and participation in the spot market has taken place only when electricity prices have been high. Since December 2022, the plant has had 69 days of production and has generated approximately 515 GWh of electricity with CO2 emissions of approximately 410 kilotonnes.