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UPM and Lappeenrannan Energia Oy May Build Bio-Energy Plant in Finland
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Helsinki, Finland, 07 June 2006 –- UPM and Lappeenrannan Energia Oy have started negotiations to investigate the profitability and prerequisites for building a joint power plant at UPM's Kaukas mill site in Lappeenranta, Finland.

The study covers a plant with a fuel power equivalent of 400 MW. In connection with the negotiations, the possibility of carrying out the project in cooperation with Pohjolan Voima Oy will also be studied.

In the event of the power plant being built the plant's energy sources would be bark and energy wood, i.e. logging residues and stumps as well as peat. It also would use sludge from the Kaukas mills biological effluent treatment plant. The plant is expected to help decrease the carbon dioxide emissions in Lappeenranta.

The plan is that the new plant would generate process heat and electricity for UPM's Kaukas mills and provide electricity and district heating for Lappeenrannan Energia Oy.

A decision to build the plant will be made separately in the event that these current investigations show that the prerequisites would be met. The total investment to build the plant is estimated to be EUR 180 million. The cost would be shared by the parties according to a separate agreement.

Provided the project is completed, the new power plant could be operational at the earliest by the end of the year 2009. It would then replace the 40-year-old steam power unit at Kaukas and most of the energy generation capacity of Lappeenrannan Lämpövoima Oy's 30-year-old Mertaniemi power plant.


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