High degree of self-sufficiency in electricity at low risk

Photo: Torbjörn Bergkvist

Power and Energy
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SCA is Europe’s largest private forest owner; and in addition to producing wood, the company’s 2.7 million hectares of land offer considerable wind power production capacity.

This provides the company with excellent opportunities to produce renewable electricity with land-based wind power. More than 20 per cent of Sweden’s installed wind power is currently on SCA land in northern Sweden.

By investing in its own wind power capacity, SCA is striving to become fully self-sufficient in electricity. In order to achieve a high degree of self-sufficiency at the lowest possible risk, the company has actively chosen not to enter into so-called Power Purchase Agreements (PPA).

“We want to be able to produce renewable electricity and have a high degree of self-sufficiency to meet our own needs. We want to do this at low risk and have therefore waived PPA, for example regarding production at Skogberget,” says Mikael Källgren, President Renewable Energy at SCA.

To minimise financial risk, SCA acts in a similar way on the electricity market for both production and consumption, which means that price variations cancel each other out. This is done without entering into PPAs for the wind farms that the company owns.

PPAs spread the risks associated with the electricity market between contracted parties. The type of PPA that has affected the profitability of several wind farm companies entails an obligation to deliver a certain amount of electricity for a certain period of time at a fixed agreed price, which may mean that wind farm owners have to buy more expensive electricity on the spot market when their own production is insufficient. In 2022, for example, when Russian gas imports to the EU were stopped and the price of electricity jumped, several power companies with this type of exposure suffered significant losses.

As part of achieving a high degree of self-sufficiency in electricity and increasing its already large climate benefit, SCA has completed the acquisition of two wind farms that it will operate itself.

One is the existing Skogberget wind farm in Markbygden, Piteå; the other being the Fasikan wind power project, located on SCA’s land in Bräcke municipality in Jämtland. The latter is to be completed and enter service at the beginning of 2026.

Through its own wind power capacity, SCA supports the supply of electricity, contributes to a more competitive price environment, and a high degree of self-sufficiency.

In addition to owning and operating its own wind farms up to full self-sufficiency, SCA’s wind power strategy also includes land leases for other operators and project development where wind farms may be sold or retained for operation.

Source: SCA