UPM will strengthen its cost competitiveness and reduce its CO2 emissions by 5% by investing in a Combined-Heat-Power (CHP) plant at its Nordland paper mill in Dörpen, Germany. The new facility supports the German energy transition “Energiewende” by contributing to the stability of the public power system.
The EUR 95 million investment to a new, highly efficient 80 MW gas fired power plant is financially attractive and further improves UPM’s environmental performance. The investment has a payback time of 3 years. The plant, planned to go on grid in Q3 2022, will cover the mill’s heat demand while enabling active participation in the increasingly volatile German electricity markets.
Annual cost savings of more than EUR 10 million will start as of 2023. The investment is estimated to decrease UPM’s CO2-footprint by 300 000 tonnes (scope 2). UPM has proven the concept at its Schongau mill in Bavaria with good results.
The investment supports the phase out of coal power generation in Germany and is in line with the government’s goal of a 65% share of renewable electricity in total electricity consumption by 2030. The plant will be built under the German Combined-Heat-Power Cogeneration Act.
“This investment will provide a stable and economically predictable power and heat supply, significantly strengthening the competitiveness of the four graphic and speciality paper machines at UPM Nordland. By providing flexible generation capacity, the CHP plant will support overall system stability and integration of increasing renewable power generation. As an energy intensive industry player, we thereby take an active role in the transformation of the German energy system towards a minimal carbon footprint”, says Winfried Schaur, Executive Vice President, Communication Papers.