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Old wooden pallets heat up an entire town

A close cooperation between pallet company STEA and energy supplier Energi Ikast has provided inhabitants of the town of Engesvang with cheap heat from old wooden pallets. According to the Danish Bioenergy Association, it is “a beautiful example of local resources gaining value in the form of carbon-free energy production”.
Inhabitants in the town of Engesvang now save 2,000 kroner a year on their heating bill, and Energi Ikast has built a modern heating plant that surpasses latest standards for carbon emissions.

Publiceret: 15.06.2017
Af Didde Rishøj mail

What if you could get rid of old wooden pallets that would otherwise have gone to the landfill, avoid unnecessary transport with lorries, reduce costs and safeguard the environment?

What if you could be at the forefront of concepts such as circular economy and CO2 accounting and benefit the local community? And on top of it all, make a profitable business out of it?

It sounds utopian, but in the town of Engesvang in central Jutland, a brand new heating plant is physical proof that such an idea exists - and can become reality. 

Old wooden pallets are here ground into wood chips and used as carbon-neutral biofuel at the newly established heating plant. In the course of a year, 5,000 tonnes of wood chips are here pushed through an oversized garage door in the heating plant and end up as heat in pipes further down the road at 760 households in Engesvang, as well as at the town’s six largest companies.

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Saves 2,000 kroner a year

The plant was built on the site of the company STEA, whose wood waste in the form of wood chips - equivalent to 250 filled lorries - no longer needs to be driven away. This helps to reduce CO2 emissions, expenses for the company and wear of the roads. Inhabitants in Engesvang now save 2,000 kroner a year on their heating bill, and Energi Ikast has built a modern heating plant that surpasses latest standards for carbon emissions.

“One shouldn’t do what everyone else does. We always try to think smarter and find solutions that ensure better utilisation of natural resources and that are good for the environment. And then we find a way to make it a profitable business,” says Johnny Fiskbæk, owner of STEA.

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Economy was lagging behind

STEA is a supplier of heavy wooden packaging in Denmark and is responsible for the entire distribution of wooden pallets to several of the country’s largest companies. The pallet companies also manufactures made-to-order wooden packaging and has its own transport company. A few years ago, STEA was in need of more heat for e.g. new drying rooms, which got Johnny Fiskbæk thinking.

He did the calculations and realised that a new wood chip boiler could produce more heat than the company needed. But after a conversation with the local heating plant, it turned out that the expenses for a new boiler would be greater than the profit company would make from selling surplus heat.

“So environmentally, it was a really good idea, but the economy was lagging behind. If environment and economy were to go hand in hand, we needed to turn up the volume - and that would mean expanding to a combined heat and power plant. It turned out that the local heating plant was becoming too small, and Energi Ikast liked the idea of building a new heating plant on STEA’s site. We agreed that they would build the plant, and we would use our knowledge of wood and wood chips to operate it,” explains Johnny Fiskbæk.

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A gentlemen’s agreement

Neither STEA nor Energi Ikast had prior experience with this type of cooperation - or with constructing an ultramodern heating plant worth 25 million kroner, for that matter. But they succeeded, in part because both parties drew upon each other’s expertise in the process.

“The key to making it work was a very close cooperation with Energi Ikast, and this has been utterly satisfactory the whole way through. We made a gentlemen’s agreement and entered the cooperation with a will to succeed rather than get hung up on details,” says Johnny Fiskbæk.

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Decided to take the lead

Getting started with environmental initiatives early on has worked in STEA’s favour. For example, because only pure wood can be used as fuel in the heating plant, thorough sorting of the old wooden packaging is required to get rid of plywood and painted wood. At STEA, this sorting procedure was already in place - and the company was naturally environmentally certified before the idea for the heating plant came about.

“Natural resources are scarce, and we know that if the companies themselves do not focus on resources and the environment, they will be ordered to do so from the political side. It will happen - and it will bring major investments with it. STEA’s stance has always been that one might as well be prepared and take the lead,” says Johnny Fiskbæk.

Beautiful example

At the Danish Bioenergy Association, Head of Secretariat Michael Persson praises the innovation and can-do attitude of the Jutland-based company.

“It is a a beautiful example of local resources gaining value in the form of carbon-free energy production. By using by-products that are already on site and sorted, we can utilise the resource optimally and save on transport and processing. This ensures that the solution is optimal in terms of the environment and energy, while also being economic for the companies,” says Michael Persson.

STEA and the wooden pallets
Located in Engesvang near Silkeborg
The company has 60 employees, supplies wooden packaging and manufactures heavy-load packaging
Has own transport company
Sister companies in Sweden, Norway and Germany
The heating plant was built in 2015 and cost DKK 25 million
STEA operates the plant in cooperation with Energi Ikast

We always try to think smarter and find solutions that ensure better utilisation of natural resources and that are good for the environment.
JOHNNY FISKBÆK, OWNER OF STEA.
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PUBLISHED: 6/15/2017 LAST MODIFIED: 6/15/2017