Finnish paper company UPM is to build a new combined heat and power plant at the UPM Schongau mill in Germany.

The target is to significantly reduce energy costs as well as to secure the energy supply. The total investment is $112m, the company said in a press release.

The new power plant will generate process heat as well as electricity for the mill. It will also provide sustainable and energy efficient district heating for roughly 750 households and public institutions such as local school and hospital in Schongau. The renewed energy supply at the mill will be based on the highly efficient combined heat and power technology utilising gas as a fuel.

“The new gas power plant will improve the security and self-sufficiency of energy supply to our mill,” explains Winfried Schaur, General Manager, UPM Schongau. “The renewal of the energy generation ensures efficient production and will safeguard the competiveness of the mill. Furthermore, it guarantees a sustainable paper production loop based on innovative and low-emission technologies.”

The start-up is planned by the end of 2014 and the gas power plant will replace the old plant facility which has operated for more than 40 years.

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