Farm-Scale Wood Energy Solution: Kuittila Farm CHP, Nurmes, Finland

Introduction

Kuittila farm is located in Nurmes in a remote area of Eastern Finland. This is a good

example of a successful establishment of a small-scale heat and power production (CHP)

which has been operating since December 2012. Kuittila Farms aim is to reduce the energy

costs, improve the security of energy supply and eventually become self-sufficient in energy.

A company, Kuittila Power Ltd., was established to provide energy for the farm, and co-

located engineering works. The farm is relatively large-scale in that region having 160 dairy

cows, the same number of young cattle, and two milking robots.

The CHP plant is based on the gasification of wood chips. The 140 kW (40 kW electricity and

100 kW heat) plant can produce annually up to 1200 MWh of energy. Woodchips are

gasified to process gas (incl. CO, H2, CH4) that is used in combustion engine (AGCO Sisu

Power). The plant uses annually about 1400 loose cubic of wood chips that are dried by

using natural drying and excess heat from the plant. The plant has been designed and

manufactured in Finland by Volter.

Kuittila Farm is a good example case how a farm can save money and be self-sufficient in

energy when an investment is made for bioenergy.

Raw Material

Kuittila farm is located in the middle of a forest. Wood supply is local and is a sustainable

raw material. The biggest reason for investing in a wood chip CHP plant was the availability

of raw material. The other option for Kuittila farm may have been to use slurry from cattle

and produce energy using Anaerobic Digestion (AD). Kuittila farm’s 160 dairy cows can

produce more than 10 tonne slurry which is 125-150 kWh energy. Gas from the AD could

have also been used for farm vehicles but during the investment decision making period,

there were no proven AD system available for farm-scale plant. Kuittila farm wanted to

have a simple and easy system to operate which consumed very little of their time. Wood

was then the best solution for them.

According to Metla’s studies (Anttila etc. 2013) there is a lot of unused forest bioenergy

potential in region of North Karelia and Kainuu. There are some big power plants in Joensuu,

Kajaani and Kuopio whose procurement area slightly overlaps with Kuittila farm’s

procurement area but most of the competitors are small plants in area of North Karelia and

Kainuu. There are also other wood industries which use some of the small trees which come

from thinning. Technically some of the potential might be also hard to harvest because of

the costs in harvesting, long transport distance, forwarding distance and particularly forest

owners’ willingness to sell wood. Theoretical potential for small trees from thinning in the

procurement area is slightly more than 160,000 m3 and forest residues from clear cutting

around 55,000 m3 according calculation made using Metla’s database and ArcGIS (Anttila

etc. 2013) (Figure 1).

Figure 1. Forest energy potential near Kuittila farm. Kuittila farms main source of raw material is

thinning wood but logs from final fellings (logging residues) could be used as well. There are several

plants nearby and the closest biggest one is the district CHP plant in Nurmes. (Analysis made by

Mikko Nivala, Metla Joensuu).

PROCUREMENT

Kuittila farm have outsourced the raw material procurement to local company Karjalan

Metsä ja Enegia Ltd (Karelia Forest and Energy Ltd, http://www.kmeoy.fi/). KME Ltd is a

local, knowledgeable and reliable partner that manages the energy supply chain from the

forest to a plant. They offer a competitive return to the forest owner and give their forests

the best possible care and provide high quality raw material for the users of forest energy.

They deliver wood to ensure energy efficiently and responsibly produced, high-quality and

cost-efficient heating energy. Procurement of wood energy is providing jobs and keeping

the money in the region.

The procurement of forest energy (thinning wood) consisting of harvesting, forwarding,

chipping and transporting wood chips to the plant is shown in Figure 2.

Figure 2. The Kuittila small-scale CHP plant supply chains: The left is a supply chain of a wholetree

chain and right is for delimbed stemwood delivery. The main source of raw material for Kuittila farm

is small-sized thinning wood.Sources: http://www.forestenergy.org/observer:get_page/observer/action/details/itemid/153&viewportheight=1105&viewportwidt

h=1920

Procurement costs in Finland is depending on the average size of harvested stem, forwarding and transportation distance but are close to following numbers (based on interviews).

Operation €/m3 (solid)

Harvesting 9,0 -10,0

Forwarding whole tree 7,8 - 8,0 and stemwood 5,8 – 6,0

Chipping 5,0 – 5,5

Transportation (container 60t truck, chips) 7,0 – 10,0

Handling and management 1,5 – 2,0

Total 30,3 – 35,5

Stumpage price is not included to harvesting costs.

COMBUSTION

The energy conversion technology is designed by Finnish Company Voleter and is based on

wood gasification (Figure 3.)

Figure 3. Volter’s wood gasification system to convert wood chips to heat and electricity (Source: http://www.volter.fi/technology)

The plant needs high quality dry woodchips, mainly from thinning wood that are fed to the

gasifier. Woodchips are pre-heated in pyrolysis before the gasification. Gasification

temperature is between 900 and 1200 Celsius degree. Gas components consist of 25 %

carbon monoxide, 18% hydrogen and 3% methane. Gas is cooled from 550 Celsius degree

to 200 Celsius degree filter temperature. Fine soot is filtered and the gas from wood is

cooled to 50 Celsius degree before it is ready for combustion. The combustion engine runs

the generator and produces high-quality electricity for the farm and outside through the

national grid. The heat from the gas and engine cooling is utilised in the farm scale micro

heating network. (Source Huikuri N. etc. Bioenergy in Pielinen Karelia Huikuri

http://www.forestenergy.org/observer:get_page/observer/action/details/itemid/153&viewportheig

ht=1099&viewportwidth=1920))

Table 1. Small-scale CHP -unit of Volter Ltd.

(Source:http://www.forestenergy.org/observer:get_page/observer/action/details/itemid/153&viewp

ortheight=1099&viewportwidth=1920)

Model Volter 40

Fuel Forest chips (birch, spruce, pine) Fuel moisture <18% Fuel particle size 8mm ≤ P ≤ 50mm, fines (<3,15mm) <1%, all <63mm Container Length 6m, Width 2.5m, height 3m, mass about.10tn Container structure Steel structure, insulation Colours According to contract Fuel feeding Spring agitator outside the container Engine AGCO Sisu Power Power Generator 40kW, heat power 100kW Power input 1,5-2kW Fuel consumption Approx.4,5 loose-m3/24h

Volter have made a similar small-scale CHP plant for Mekrijärvi Research station in Eastern

Finland.

Figure 4. Volter 40 CHP-unit is a compact, container-build solution for small-scale heat and power

production. Picture: Metla, Robert Prinz

Forest energy policy in Finland and socio-economic effects of forest

energy

Regulations

Bioenergy procurement has to be ecologically, economically, socially and culturally

sustainable. According to the Forestry Development Centre Tapio’s guideline for forest

energy procurement, forest energy is not allowed to harvest from stands that suffering lack

of boron (Boronium, B) or stands with poor, sandy or dry soils and related peatlands. If

spruce is the dominant species in the stand, there are limitations in the thinning rate and

fertilisation is recommended.

(http://www.tapio.fi/files/tapio/Aineistopankki/Energiapuusuositukset_verkkoon.pdf)

There is also a list of areas restricted or forbidden to do any forest management in forest

law in section 10. (http://www.finlex.fi/en/laki/kaannokset/1996/en19961093.pdf)

Forest Pest legislative reform aims to respond to changing natural conditions. The purpose

of the Act is to continue to ensure good health of the forests, in particular by limiting the

fresh lumber and damaged softwood storage in the forest during summer time. The new

law is intended to preserve the obligation to remove the fresh pine and spruce timber and

also damaged trees from the forest and beside the road during the summer period.

Removing this obligation would apply regardless of use of timber, which has a basal

diameter of more than 10 cm. Bioenergy wood which volume is at least half are consisting

of trees that basal diameter are more than 10 cm and are pine and spruce, should be

removed from the felling site, or interim storage. In addition, the proposal provides for a

new obligation to remove felled timber within one month of felling in southern Finland

during the summer period. This reduces the risk having the second generation of the Ips

species. The new law is scheduled to come into force at the beginning of 2014 onwards.

(http://www.mmm.fi/fi/index/etusivu/metsat/hankkeet_tyoryhmat/lainsaadantohankkeet_

0/metsatuholaki.html)

Supportive policies and Action Plans and Strategies

In Finland it is possible to get incentives for harvesting and forwarding energy wood from

thinnings. Support for energy harvesting is €7/m3 and the amount of wood from stand has

to be more than 20 m3. The incentive is not paid for wood energy, and will be for personal

use. Incentives can be paid only if they meet the financing of the young forest management

criteria and wood is going only for energy use. The Forest Centre of Finland is controlling

and monitoring this incentive. The incentive amount may change for the future for €5/m3

and some terms may change during or after 2014. (http://www.metsakeskus.fi/energiatuet)

The biggest change in transport policy is the new decree that allow new masses and

dimensions for heavy goods vehicles. This means that in Finland, 76 tonne trucks can be

used for wood transportation and the dimensions of the trucks can be increased. This will

increase the capacity of load and in that way it will reduce the costs of truck

transport.(http://www.lvm.fi/pressreleases/4150413/better-competitiveness-through-new-

masses-and-dimensions-for-heavy-goods-vehicles)

The Finnish Action Plan for Renewable Energy was launched in 1999 and updated in 2002.

The Action Plan has the vision of doubling utilisation of renewable energy sources by 2025,

as compared to the situation in 2001 317 PJ (7.6 Mtoe), when their share was 23 per cent of

the total energy consumption. In the attempt to reach the targets, wood based fuels and

recovered fuels play a leading role in Finland. The increase in the use of renewable energy

sources will be obtained almost entirely from bioenergy.

The National Climate Strategy, launched by the Finnish Government in 2001, highlights the

targets and measures to meet the Kyoto commitments in Finland. In the years 2008–2012

emissions of greenhouse gases should be reduced to the level of 1990, when they were

equivalent to around 76.5 million tons of carbon dioxide. In order to meet the target, it is

necessary to implement an energy conservation programme and a programme promoting

renewable energy sources. Together these two programmes may account for about half of

the targeted emission reduction.

Challenges in Future

The biggest challenges are wood energy mobilization/logistic and harvesting practice.

Finnish Energy Industries Association has listed some of the factors that are relevant for

forest energy to win some of the challenges:

The development of the train logistics for delivery of energy, requires competition

(for example, in Sweden there are already 40 players in railway business when in

Finland it is still nearly a monopoly)

Increase the maximum load of trucks

Flexibility for drivers working hours in exceptional circumstances

Reducing tax for producing fuel for transportation

One of the challenges in transport is to build new competitors to the railway transport

business. The other one is to support the use of other fuel sources than oil in transportation

(biofuels). The first step is to increase the use of biofuels in passenger vehicles.

(http://www.lvm.fi/pressreleases/4147986/working-group-transportation-must-reduce-its-

dependence-on-oil)

RES directive may make the small player role in energy more difficult in Finland, as they will

need to invest in the system which will implicate the origin of the raw material.

The biggest factor to make forest energy markets work well is to ensure there are stability in

policy, as well as the competitiveness in the forest energy fuels compared to fossil fuels.

Employment effect and economy

Wood energy production and raw material procurement requires a lot of manpower. In

Kuittila farm procurement: two employees are needed for harvesting and forwarding of

wood, one employee is needed for the transportation of wood chips, one employee is

needed for chipping and the whole supply chain needs one manager for taking care of the

entirety of supply chain. These five employees are generally enough when designing the

supply chains of thinning wood. However, the raw material needs for only Kuittila farm is so

small that additional end-use facilities are needed to keep the labour and machine cost low

enough. During the peak season when there is more need of employees, companies can use

students or trainees. In total, the costs of labour are around €12,800/month plus social fees

in Finland. Annually their salary is more than €150,000, most of which will stay within the

region. Salary level is an average from surveys and there might be bias depending amount of

answers. (www.palkkavertailu.com). Most of the machines and vehicles used in the

procurement are made in Finland, even inside the Eastern Finland region close to Kuittila

farm. The CHP plant installations and maintenance needs are from regional or national

manpower. The operating of the plant itself does not require any additional manpower in

Kuittila farm but the whole supply chain around it is a good example of the holistic approach

of supply chain and how it will positive effect to the region and its economy

The investment costs of the CHP unit were €223,000, and the whole project €400,000. The

project received 35 % public investment support and is expected to pay back in 10 year

period.

References:

Huikuri N., Okkonen L. Kuittila Farm. Small scale CHP, Bioenergy in Pielinen Karelia

http://www.forestenergy.org/observer:get_page/observer/action/details/itemid/153&view

portheight=1099&viewportwidth=1920