Price for Connection to Gas Pipeline Has Multiplied
Nordic Sugar is the only company receiving energy from the new gas pipeline, which has cost one and a half billion to establish. The price for connecting has quadrupled, reports FemernBusiness.
The gas pipeline while it was being installed.
Anders Knudsen
A gas pipeline costing one and a half billion kroner was supposed to bring green energy and new opportunities to Lolland-Falster. But with only one customer - Nordic Sugar - it remains an expensive project that has left many questions and even more bills.
When it was decided back in 2021 to establish the gas pipeline and connect Lolland-Falster with the main line in Zealand, it was with the promise that there were many interested parties. According to a response to the Danish Parliament, there was great interest:
- Agreements have been made with five companies, including Nordic Sugar, and an additional 15 business customers have shown interest in connecting to the gas pipeline.
Nordic Sugar and all the others
There is no doubt that Nordic Sugar was the most important customer to get on board. The CO2 emissions were only surpassed nationally by Aalborg Portland, and a gas pipeline with a lot of biogas was therefore a good solution, according to politicians. And other companies were certainly also welcome.
Several companies, including Hardi, Raaco, Metalcolour, and Maribo Asphalt Factory, wanted to be connected to the gas pipeline. The companies desired to emit less CO2, and with the prospect of a gas pipeline where a larger and larger part consists of CO2-poor biogas, it was almost a given.
FemernBusiness reports that contracts were signed, and the companies were ready to switch energy sources when there was access to gas.
There were very concrete descriptions of the establishment. And prices for this. And thus signed documents. But reality turned out differently. After the agreements were made, there was a lot of silence about the upcoming establishment, and only at the beginning of 2024, something is happening. But now the price has increased. A lot. And it is the state's gas distributor Evida that is raising the price. What was a couple of million became many millions.
Too expensive for companies
One of the companies that showed interest was NCC-owned Maribo Asphalt Factory. They are still interested, but at a different price.
- We would like to produce with biogas, but the connection itself is currently far too expensive. The connection price does not match a possible payback period compared to what we would save compared to what we do today, according to NCC.
Another company that initially expressed interest is Metalcolour, which works with surface treatment and pre-coating of steel and metal sheets. And the reason they are not connected to the gas pipeline today is solely the connection price.
- We would very much like access to greener energy, but we were promised a completely different price when we first discussed it. So it became too expensive and could in no way pay off for us in the long run, says CEO of Metalcolour Jakob Søndergaard Nielsen.
FemernBusiness reports that the connection price was quadrupled or quintupled compared to what was stated in the original agreements. This price increase caused the companies to withdraw, and therefore there is now a gas pipeline with only one customer.
Biogas as the hope for the future
Although the project has been fraught with challenges, there is still hope for the future of the gas pipeline. Two biogas plants are to be connected. First, it concerns Bigadan's plant in Nysted, and then Nature Energy's upcoming plant at Abed, which is expected to be connected by 2026. The plant at Abed will produce biogas from, among other things, beet waste supplied by Nordic Sugar. The produced biogas is to be fed back into sugar production.
The gas pipeline was presented as a necessity for both green transition and local growth, but the project has left more challenges than solutions.
The costs of the gas pipeline are financed according to Altinget via tariffs, leaving 292,000 private gas customers and about 38,000 businesses with the majority of the billion-dollar bill.
The last part is financed by the energy company Andel, which pays 100 million kroner to lease the gas pipeline for 15 years. And they sell the gas to Nordic Sugar.
What remains are some companies that want to emit less CO2, but believe that it is Evida that has backed out of an agreement and a clear price. Much has become more expensive since 2021. Also building materials. All parties acknowledge this.
- But milk hasn't increased that much, as one source puts it.
At Evida, they say they stick to the prices that are currently in place
- This also applies to the connection of new customers, which therefore, among other things, depend on market prices.
And they also state that they do not comment on specific customers.
