Bio-investment adds local incomes and energy independence!

1. Kalle Karttunen, Senior researcher (D.Sc)
Lappeenranta University of Technology (LUT)
School of Energy Systems,
Bioenergy Laboratory
WBA, World Bioenergy Association
Webinar, 20th of June 2018
Bio-investment adds local incomes
and
energy independence!

2. CONTENT AND AIM
Content
1. Background
Energy sector
Forest sector
2. Material and methods
3. Results
4. Conclusion
Aim
Aim of the webinar is to present “Socio-economic benefits of bioenergy”
Aim of my presentation is to present “Socio-economic benefit of bio-investments at the
regional area of Finland”
”Impact of forest sector on regional economy of South Savo in Finland -Future vision
on 2020 century” project (2016-2018) together with LUT, University of Helsinki (Rural
Institute) and LUKE (Natural Resources Institute Finland)
Karttunen et al. Regional socio-economic impacts of intensive forest
management, a CGE approach. Manuscript.

3. Total energy 362 TWh, in which wood-
based 94 TWh (25%) (2015, LUKE)
Forest chips
42 %
Forest industry
by-products
52 %
Rycycling
wood
4 %
Wood pellets
and
briquettes
2 %
Solid wood-based sources in heat and power
plants 35 TWh (2015, LUKE)
–> Forest chips ~15 TWh (4% from total)
Heat and power
10 %
Firewoods
4 %
Forest industry,
black liquor
11 %
Hydro power
5 %
Wind power
1 %
Peat
4 %
Oil
24 %
Caol
8 %
Natural gas
6 %
Nuclear power
19 %
Electricity net
import
4 %
Other
4 %
Forestchips,4%
Solid wood-based sources in heat and power plants (10%)
Wood-based energy is a big player of energy consumption in Finland (25%) but
The share of forest chips are still at low level in Finland (4%)
Wood 25%
1. BACKGROUND, Energy sector in Finland

4. Background, Energy sector; Fossil fuels
- The share of fossil fuels has decreased
- Oil could be decreased in transporting (~55%)
- Coal could be decreased in heating
Oil consumption in Finland, 2007-2016
Coal consumption in Finland, 2007-2016
Fossil fuels
Renewables

5. Forest sector is the most important part of bioenergy in
Finland
Forest sector includes the value chain from forest
management to the final products
Forestry
Forest industry
The regional area of South-Savo is the heart of forestry in
Finland with the biggest timber sales (Forestry GDP ~10%,
but with multiplier effects GDP ~17%, 750 M€)
But forest industry has not invested that much at the area, the
share of GDP stays small (Forest industry GDP ~3%)
Forest sector employs about 5 000 persons (half of forestry
and forest industry) at South Savo and over 80 000 persons
totally in Finland
Background,
Forest sector in Finland and
Regional area of South Savo
Source: Suomen metsäsäätiö
(ref. Stats 2011-2014average)
Pulp and paper
Forest products
Forestry services
Harvesting
Silviculture
South Savo Finland
South Savo Finland
Employment
Value added
persons persons

6. Scenarios define the supply and demand of forest biomass at the region of South
Savo and their socio-economic impacts by 2030
Supply Demand
BAU Business-as-usual Stay at 2015 year level
+
SCE 1 Round wood intensive Sawmill: 0.5 M.m3
SCE 2 Energy wood intensive Biorefinery: 0.7 M.m3
=
SCE 3 Intensive forest management Total: 1.2 Mm3
2. MATERIAL AND METHODS
Scenarios
Scenarios
REGIONAL SOCIO-ECONOMIC IMPACTS
(Energy wood -> Torrefied biocoal pellets)
(Pine sawlogs -> Pine timber)
(Pine sawlogs + energy wood)

7. Energy user sites (forest chips)
Mechanical forest industry
Chemical forest industry
Material and methods
Supply and demand

8. Material and methods
Simulations
• Forest management simulation method was
used for supply analysis
• MOTTI forest management simulation
software
• > 4000 National Forest Inventory plots at
region was simulated
• It is possible to grow forest with several
alternative management regimes to
study overall removals and profitability
• Computable general equilibrium (CGE) model
was used to analyse impacts on regional
investments and supply scenarios
• RegFinDyn (University of Helsinki, Rural
Institute) software
• It is possible to cover interconnection of
economy and study overall regional
impacts with multiplier effects

9. STAT BAU 1 SCE 2 SCE 3 SCE
Supply of wood?
STAT BAU 1 SCE 2 SCE 3 SCE
Demand of wood?
3. RESULTS, supply analysis
Regional investments will have
an influence on forest management
and wood supply!

10. Result,
Regional energy use forecast
7.3 TWh 7.0 TWh 6.9 TWh
- Total energy use may slowly continue decreasing at South Savo region
- Regional use of heating oil and peat has decreased
- Share of wood fuels has stayed high ~40% but at the same level but forest fuels has doubled
- Forest chips will be refined to help other regions for better energy independency!

11. Result
BAU
The development of regional gross domestic product (GDP) has increased positively and may
continue so, but the unemployment has been developing poorly and may continue so…

12. By 2030:
SCE 1 ~120 M€
SCE 2 ~125 M€
SCE 3 ~150 M€
0
20
40
60
80
100
120
140
160
M€
SKE 1 (saha) SKE 2 (biohiili) SKE 3 (saha+biohiili)
Results
GDP
Annual regional impacts on economic (total, Million €)
compared to BAU
SCE 1 SCE 2 SCE 3

13. Annual regional impacts on employment (person-years)
compared to BAU
By 2030:
SCE 1 ~550 person-years
SCE 2 ~575 person-years
SCE 3 ~780 person-years
0
100
200
300
400
500
600
700
800
900
htv
SKE 1 (saha) SKE 2 (biohiili) SKE 3 (saha+biohiili)
Results
Employment
SCE 1 SCE 2 SCE 3

14. 4. Conclusion
National level
Regional wood-based biorefinery investments would be important not only
socio-economically but also for energy independency in Finland
The coal based power plants could be replaced by wood-based fuels,
in this case ”torrefied biocoal pellets” was studied, which doesn´t
demand for a new power plant investment
Regional oil use in district heating could still be reduced and replaced
by wood chips or other renewable energy
Transportation sector would national level need all kind of
renewable solutions to replace the biggest share of oil
consumption (55%)

15. Conclusion
Regional level
We studied several regional investments and how they would influence on
wood supply and socio-economic situation!
All scenarios (SCE 1–3) would have positive socio-economic impacts on
regional area of South Savo by 2030
Total scenario (SCE 3) socio-economic impacts were the largest
GDP increase 2.8 % (150 milj. €)
Employment increase 1.6% (780 person-years)
Individual sawmill (SCE 1) and biorefinery (SCE 2) impacts were quite
similar
Investments can be supported by regional forest resources to achieve better
energy independency and positive socio-economic impacts
Positive regional impacts would reflect to all sectors with multiplier effects

16. Thanks!
Kalle Karttunen
kalle.karttunen@lut.fi
Lappeenranta University of Technology(LUT), School of Energy
Systems, Laboratory of Bioenergy, Lönnrotinkatu 7 50100 Mikkeli
http://www.lut.fi/web/en/lut-savo/laboratory-of-bioenergy