Renewable projects and power from shore
The investments in renewable energy projects and the electrification of the Company’s main producing assets are key drivers in the Decarbonisation Strategy to achieve carbon neutrality from 2023.
With our commitment to three renewable energy projects, we have a net power generation of around 600 GWh per annum from late 2023, which will cover all of our expected net electricity usage for our offshore producing assets.
This means that from end 2023 over 95 percent of our oil production will be powered by our own generated renewable energy through projects which also provide good leveraged economic returns.
Karskruv wind farm project
Lundin Energy has a 100 percent interest in the Karskruv wind farm project in the municipality of Uppvidinge, Kronoberg County, in southern Sweden. OX2 is constructing the wind farm as part of an EPC contract. The wind farm will be generating electricity from 20 turbines at a hub height of 116 meters and will generate around 290 GWh per annum gross on completion in late 2023. The total capacity is 86 MW combining 4.3 MW from each turbine supplied by Vestas. The project will contribute renewable energy to replace the Company’s power consumption from its electrified oil and gas asset.
Metsälamminkangas (MLK) wind farm project
Lundin Energy has a 50 percent interest in Metsälamminkangas (MLK) wind farm project 80 km south east of Oulo on the east coast of Finland, with the remaining 50 percent held by Sval Energi, a portfolio company of Hitec Vision. The development started in the second quarter of 2020 and OX2 is constructing the wind farm on an EPC contract. MLK will produce around 400 GWh per annum gross, from 24 onshore wind turbines, once it is fully operational in early 2022. The site of the farm is renowned for its favourable wind conditions with an average wind speed of approximately 7.2 m/sec at hub height of about 141–151 meters. The turbines are supplied by GE and have a capacity of 5.5 MW each and 132 MW in total. The project replaces the Company’s power consumption from its electrified oil and gas asset with renewable energy generation.
Leikanger hydropower project
Lundin Energy has a 50 percent interest in the Leikanger run-of-river hydropower project north of Bergen in western Norway. The power plant is operated by Sognekraft AS who owns the remaining 50 percent. The hydropower project became fully operational in March 2021, with power produced from 8 river inlets from the two river systems Grindselvi and Henjaelvi. The capacity of the plant is 77 MW and yearly production will be 208 GWh per annum gross.
The journey towards electrification of our main assets started in 2012 with the Plan for Development and Operation (PDO) of Edvard Grieg which included preparation for electrification of the facility to become operational as part of the Utsira High power from shore area solution which also includes the Johan Sverdrup, Ivar Aasen, Gina Krogh and Sleipner fields.
When the Johan Sverdrup Phase 1 came on stream in 2019 it was supplied with power from shore through a 200 km cable from Haugsneset, located on the west coast of Norway. A second power cable will be installed as part of the Johan Sverdrup Phase 2 project and will also supply electricity to the other Utsira High fields : Edvard Grieg, Ivar Aasen, Gina Krog and Sleipner.
With the Utsira High electrification project, which will become fully operational in the fourth quarter of 2022, 95 percent of the Company’s production will be powered from shore, representing a net consumption of 500 GWh per annum of electricity. The power grid is connected to the Nord Pool power market, which is sourced mainly from renewable energy. Through our investments in renewable energy generation Lundin Energy will fully replace all net electricity usage for power from shore by 2023. The project will provide our operations on the Utsira High Area with electricity for the next 50 years which will reduce our CO2 emissions intensity to world leading levels of below 1 kg per barrel for this area. At the same time it will enhance the economic return from our operations, as running the platforms with power from shore represent several additional benefits such as improved production efficiency, improved safety and reliability, reduced environmental taxes and higher gas sales.