ContactAurora Kilpilahti Oy
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The Kilpilahti closed distribution network is the second industrial electricity network investment of Aurora and the largest single site industrial electricity network in Finland based on replacement value. It is also the first industrial electricity network to be granted a network license by the Finnish regulator. The transaction was agreed with Neste, the seller, in 2014, enabling Aurora to become a significant player in the Finnish electricity network landscape and to deepen its understanding of the special needs and requirements related to electricity distribution of the large industrial partners it serves.
The Kilpilahti industrial site, located in Porvoo, is the largest chemical industry concentration in the Nordics. The companies operating at the site consume approximately 2 TWh of electricity per year. Neste, the largest partner of Aurora in Kilpilahti, is majority state owned and it operates one of Europe’s most advanced and versatile refineries at the site. Other large partners, with long ties to Kilpilahti, include Borealis and Aga (Linde).
Aurora Kilpilahti is currently performing a significant investment plan of approximately 200 million euros in total. The investments are mainly modernisations and replacements of the existing electrical equipment, but also related to its industrial partners’ site development plans. The investments will ensure high quality and reliable “weather proof” electricity distribution also in the future, enabling us to serve our industrial partners in the best possible way.
Neste – Outsourcing electricity network releases resources
Neste’s refinery complex in Finland consists of refinery operations in Naantali and in the Kilpilahti industrial area in Porvoo. For a long time, the industrial network in the Kilpilahti area was owned by Neste, but the company sold it to Aurora Infrastructure Oy at the turn of 2014-2015. Outsourcing the network released resources for Neste’s core business.
Outsourcing the electricity network was a beneficial solution for Neste financially, operationally and from the perspective of developing the network. Besides Neste, the Kilpilahti closed distribution network is also used by other companies in the area; as the prior owner of the network, Neste also used to be the electricity supplier.
“Developing the network in the Kilpilahti area requires investments and human resources. Outsourcing the network to Aurora has released these resources back to our core business: refining fossil fuels and renewables. Now there is a specialized organization in charge of the electricity infrastructure development and distribution,” says Energy Director Jussi Hintikka from Neste.
Neste has the capacity to refine 206,000 barrels of crude oil a day in Kilpilahti, and the company’s requirements for electricity network reliability are extremely high. The objective of the outsourcing was to retain network reliability at the same level or to even exceed it. The Kilpilahti distribution network’s reliability is 99.9999 percent.
“In just a short period of time, Aurora has made multiple investments in modernizing the network and replacing the network transformer substations and remote-drive systems. There is also other significant development work under way,” Hintikka notes.
Cooperation at every level
Aurora has committed to developing the Kilpilahti area distribution network. The company’s partnership model is based on close cooperation. The operations of Aurora and Neste are integrated within the distribution network.
Different coupling and maintenance operations are coordinated, which has led to almost daily cooperation between the personnel of Aurora and Neste. Weekly cooperation includes, for example, the planning of development projects and development work. At the administrative level the companies ensure that invoicing and interpreting agreements happen appropriately.
“For us, the greatest uncertainty factor in the outsourcing was the smooth development of cooperation and whether the development of the network would proceed logically from our perspective. Now, a bit over two years later, I can safely say that the collaboration works well at every level. Aurora is committed to developing the network, so our concerns have been proven unfounded,” says Hintikka.