St1 – Challenging the Conventional

St1 is a Nordic energy company with operations in three Nordic countries. It’s a Finnish-based company that has expanded its operations to Sweden and later on to Norway through acquisitions. We learn how St1 is working towards world-changing energy solutions.

We’re an energy player in all of these three countries and the most visible part of our operations is related to the fuels retail business in Finland, Norway and Sweden under the St 1 and Shell brands,” explains Matti Pentti, St1’s Geothermal business unit director. “We’re a family-owned business. Our main owner is Chairman of the Board, Mr Mika Anttonen.”

Anttonen’s leadership has been key in defining St1’s vision, perhaps unusually for a company chiefly involved in hydrocarbons, that vision is a push towards the end of fossil fuels.

“He’s a very active owner, very keen on pushing the company and the people forward in converting fossil energy towards sustainable energy production, means of transportation and of electricity, heating and cooling,” Pentti says. “He’s very involved in the daily activities on the renewable energy side of the business.”

That strong leadership, and the fact that the company is family-owned, are integral in allowing St1 to pursue the goals that it has.

“We’re a privately owned company with one main owner which makes us very flexible because we’re not in the stock market. We have a visibly active owner so our decision-making and ability to react in different market situations is very fast,” explains Pentti. “We’re a very low hierarchy company and we aim to communicate with everyone in the company. We put the roles and responsibilities to a level where you can actually execute things making us quick to adapt to different market environments.”

Concrete Solutions

St1 isn’t simply another greenwashing energy company, talking to Pentti its clear the company takes its goal and responsibility to renewable energy seriously.

“We do visible concrete things to convert the fossil hydrocarbon business to renewable sustainable energy, with pilot schemes and concrete offerings to our customers,” Pentti says. “In Nordic countries, we have to blend up to 20% renewable fuels into traffic fuels and we do that through our own sustainable ethanol production. We are the biggest commercial wind power producer in Finland. Whatever we gain from the fossil business we invest in the renewable business. The ultimate target for us is to convert the fossil side of the business to renewable energy, and that’s where we invest most of our efforts.”

Of course, with the bedrock of St1’s business coming from the traffic fuel industry, the company takes a hit if people and goods stop moving around- as they have done recently thanks to the COVID-19 lockdown.

“There have been a lot of slowdowns in the private automotive fuel industry because people haven’t been moving so much. The volumes have been on the low side, although not so much as we anticipated,” Pentti says. “The dive in percentages was maybe half of what we anticipated but still a lot less than is typical.”

The biggest challenge St1 faces, however, is a somewhat more pleasant one to have. The company is constantly on the lookout for innovative solutions that will aid the St1 in its mission to shift the energy economy towards renewables.

“The most interesting challenge is how to select from the whole variety of interesting renewable initiatives we look at,” Pentti explains. “We’re asking how we can select the ones that really make a difference? We are known in the market as an innovative company that’s willing to invest in renewable Research and Development. We’re particularly interested in scalable solutions. We are approached almost on a daily basis by different entrepreneurs and inventors about new technologies and ways to produce electricity or renewable fuels or sustainable heat. We have to evaluate these opportunities and select the ones that will be not just superb ideas for new technology but also sustainable and solving the issue on a scale. We don’t just want one vehicle or one city or one country but a game change on a global scale.”

Choosing strategies that St1 can build on is a good problem to have, but still a large task. Fortunately, the company has developed a strategy for sorting the wheat from the chaff.

“First of all in our strategy, we have defined three clear segments which we want to evaluate. Renewable and sustainable fuels for road transport is one, and that’s about the extent we can utilise our existing network,” Pentti says. “We know gas stations are all over the world and to convert the current retail network into something else is a huge investment. So we try to find solutions to utilise the existing network and existing investments. What kind of liquid fuels could be produced using the existing infrastructure in the future? Power-to-X is currently the most interesting area we’re looking into. We’re researching how to capture carbon from the atmosphere and produce gas and liquid fuels from that carbon. The most lucrative area we’re looking into is biofuels, which we know we will need to use in the short term.”

Beyond transport fuels, St1 is also looking at more far-reaching energy solutions in the sustainable electricity sector.

“We’re the biggest wind power producer in Finland with our wind farm capacity, with new areas like northern Norway opening up. It’s very lucrative looking at wind conditions and looking at new areas of Finland and Sweden to expand our wind farm capacity,” Pentti tells us. “The third area we’re looking at is sustainable heat. We have stated that in our production we don’t want to burn anything, and that means oil, gas and biomass are ruled out. Anything you burn will end up in CO2 in the atmosphere whether you take it from circulation or a native fossil fuel, you don’t reduce the carbon in the atmosphere which is the ultimate goal we should all look to. So we’re looking into geothermal energy and we are a medium-sized player already in the ground source heat pump in Finland. We have a unique pilot project which is the geothermal plant which has two of the world’s deepest geothermal wells. Under these conditions and guidelines, we can look for different technology and optimisation opportunities.”

A Clear Vision

While St1 doesn’t know exactly what the future of green energy will look like, they’re ready to be at the centre of it and convinced it will be a positive one.

“It all comes to the fact that we have a clear vision of what we’re doing and why we’re doing it. We want to be the leading CO2 aware company in the world. We need to aim our best resources, be it human resources, technology funding, going into this conversion from hydrocarbons to renewables,” Pentti insists. “In that sense, our people are very aware that they play an extremely important role in the whole value chain of this company, taking very good care of our existing customers with the base cash flow for our company and that enables us to invest in research and development and pilot projects on the renewable side of the business. We have a clear path where we’re going and that gives meaning to people’s day-to-day work.”

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