Graanul plans cogenerating capacity growth

TALLINN - One of the biggest producers of wood granules in Estonia - Graanul Invest - is planning to invest hundreds of millions of kroons in Estonia and in the other Baltic states in coming years in order to establish a total of five combined heat and power plants, reports Eesti Paevaleht. The first one is planned to be launched in the beginning of 2012 in Patkula, Helme parish, in Valga County.

According to the business plan, the next two would be built in Launkalne and in Incukalns in Latvia. The fourth one should be built in Imavere, Jarva County in Estonia and the fifth in Alytus in Lithuania.
“The electricity capacity of a plant built by us is, depending on location, 5 - 8 MW and heating capacity 12 - 20 MW, with planned efficiency over 75 percent,” Graanul Invest Board Chairman Raul Kirjanen said of the recently introduced plans which were sent to the Estonian Economy and Communications Minister Juhan Parts.

The company intends to use as fuel mostly residues of forest-felling, like branches, hacked timber, etc. Graanul Invest needs electricity and heating stations to get heating energy to produce wood granules. But since electricity is also produced this way and, according to current regulations, the state supports it with renewable energy subsidies, selling electricity would be financially viable also.

Recently, however, the Estonian Consumer Protection Board completed an analysis on renewable energy subsidies which states that the state over-subsidizes the sector and should cut support. The Graanul Invest board chairman has now complained to minister Parts that, since the company has already spent on the Helme plant and received financing for the project from abroad, the possible cutting of state subsidies creates a good deal of insecurity.