Business Model

Market niche:

CO₂ Neutral Energy AB concentrates on the unoccupied market niche of municipal power plants of medium size, that are neither attractive for utility companies nor can be upgraded and operated by the end-users themselves. The locations preferred by CO₂ Neutral Energy AB are in suburban areas. The existing plants are currently run with oil or diesel and are owned by the municipalities. Due to tight finances, the municipalities have to rely on external partners such as CO₂ Neutral Energy AB for the modernization of the plants. Most municipalities are running heating plants with renewable energy already, but these plants are usually located in the city centers and not in the suburban areas preferred by CO₂ Neutral Energy AB. Also, due to the mix of renewable and conventional energy these plants are not able to receive 100% of the emission rights. The operation of the CO₂ Neutral Energy AB – plants allows the municipalities to get the full amount of the emission rights and thus generate necessary extra income CO₂ also benefitting Neutral Energy AB.

Wood as feedstock:

Sweden has the second largest forestry industry in Europe and is one of the largest exporters of timber and pulp products worldwide. Wood as fuel in form of chips or pellets is readily available in large quantities and at attractive conditions, thus offering high supply security. Wood is a renewable resource as the Swedish forestry industry is working on a sustainable basis, i.e. every year the increment volume of wood is larger than the felling volume. In contrast to other renewable resources such as wind or solar power, wood can be used to generate energy when power is actually needed- reducing waste of fuel and inefficiencies. Furthermore, the energy is locally sourced and in the vicinity of its’ end-users, reducing transport losses and costs.

Swedens’s Economy:

In 2010, Sweden’s gross domestic product (GDP) increased 5.5% on annual basis (Germany: 3.6%). For the year 2011 an annual GDP growth of 4.5% is estimated (Germany. 2.6%). The Swedish Krona has proven to be an exceptionally strong currency during the recent years. Compared to the Euro, the Krona gained 6.2% in value over the last 12 months alone. The US-Dollar, in contrast, depreciated by 11.8% against the Euro during the same time. Total Swedish government debt was at 39.8% of GDP in 2010(Germany: 83,2%; Greece: 142.8%).

Environment:

The influence of CO₂-emissions on global warming requires the reduction of fossil fuels used for energy generation. The EU has therefore decided to decrease CO₂-emissions by 20% and to increase the percentage of renewable energies in the EU energy mix to 20% until 2020. CO₂NE will make an important contribution to reach these goals and will therefore profit from the Swedish promotion of renewable energies.