The CEO's colum

A lot has to be done to ensure climate transition goes ahead.

After a long, cold winter and what – according to SMHI – was a "slow spring", summer finally arrived during May. And what an arrival. Looking back on the month, I will not be surprised if yet another record has been set. The kind of record that we now have mixed feelings about. Even the economy has begun to heat up. Inflation seems to have been defeated for the time being and Riksbanken has begun the journey towards lower interest rates with its first cut. We will have to wait and see how fast more cuts will come, but looking at the stock exchange, market confidence in the future is high. Even the most recession-prone sectors are recovering, and investment is once again a recurring theme for the construction industry.

Meanwhile, the many sectors that were not badly hit by the recession continue with full steam ahead. I´m thinking primarily about the green transition occurring within the industry, transport and energy sectors. New projects are constantly being announced and even though many of them are in the analysis and feasibility study stage, several big projects within CCS, fossil-free steel, e-fuels etc. are beginning to reach critical points. Many projects are commercially driven as we see demand for fossil-free products that can improve profit margins. The important thing is to make an early entry on the market, which is why projects are being run on aggressive schedules. Other projects are driven by regional goals linked to our national goal of zero emissions by 2045. But regional players have in many cases decided on even tighter schedules.

The transition can generate demand for new supply flows of materials and energy (hydrogen, green carbohydrates, carbon dioxide, electricity, heating, and cooling), which will require considerable investment in infrastructure such as roads, railways, pipes and – most importantly – the electricity grid. By 2045, electricity demand is expected to go from the current 170 TWh p.a. to around 330 TWh p.a. According to a report from Swedenergy, investment in the grid totalling upwards of SEK 1,000 billion will be required. 2045 may seem a long way away, but a large part of the increased demand will occur in the near future, which means investment of around SEK 400 billion will be needed by 2030. In addition, investments are needed in all forms of fossil-free electricity production. In other words: it´s getting pretty urgent, and to succeed, politicians and the industry need to really get moving with everything from permits and regulations to financing and pricing models. We can learn from history. Sweden´s achievement of rapidly building a stable, cost effective electricity system in the 1900s is one of the main reasons for the prosperity we enjoy today. We need to demonstrate the same resoluteness again, even if the circumstances are different.

The rising industrial consumption of electricity will generate a lot of residual heat. District heating plays a key role in ensuring that this heat can be used to the highest degree possible. But sometimes it goes the other way, i.e. surplus heat disappears due to changes in the industrial process. As is the case in Oxelösund, where surplus from the steelworks has been the main source of heat for the town´s district heating grid. Because SSAB is electrifying its process, surplus heat will disappear and Oxelö Energi therefore needs to replace it with some other supply. The solution will be to run a district heating pipe to Nyköping and buy heat from Vattenfall, which you can read about in this newsletter.

In this issue you can also read the interesting story behind the community of Oujé Bougoumou in Québec, Canada. One of the first contracts FVB won after setting up in Canada in the early 90s was to design a district heating system for a community that was being built from scratch. Oujé-Bougoumou was built for and by the native Cree tribe, who were attracted by the idea of biofuel-based district heating. They saw a sustainable energy solution that would also give them a high degree of self sufficiency. Their relatively progressive approach for the time meant that the district heating system could be built and it became a proverbial showroom for the technology in Canada.

FVB continues to grow organically, and we are delighted to attract skilled personnel with a wide range of experience within all our business areas. As usual, we present our latest recruits towards the end of the newsletter. It´s worth noting that three of our new hires have previously worked at FVB and are now returning after having worked elsewhere. We regard it as proof that we are an attractive workplace where employees know they will thrive. One of the new recruits is Marianne Brolin, the new HR Manager at FVB, who will help us to further strengthen our attractiveness and ensure we continue to hire the most skilled employees.

Summer is here and we can all look forward to a well-deserved holiday. We hope that the weather gods did not give us all their summer warmth in May and have kept something in reserve for the rest of the summer months.

On that note, FVB wants to wish all our customers a happy and relaxing summer.

Per Skoglund,
CEO, FVB Sweden

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