The war in
Ukraine has highlighted the need for energy self-sufficiency, especially in
Europe. In addition, national and international emissions reduction targets and
incentives to increase the use of renewable energy have improved the
competitiveness of solar heat. However, turbulence in the energy sector, higher
inflation, and higher costs of financing have slowed investment decisions.
Meriaura
Group’s Renewable Energy business focuses on segments with high growth
potential. These include large solar parks and smart solar power solutions for
commercial and industrial properties, ports, housing companies and
single-family homes, as well as industrial-scale solar district heating and
large systems for generating solar heat for industrial processes. Meriaura
Group has strong references and a good market position in these areas,
especially in France, Germany and Poland, where the demand for solar thermal
solutions is expected to grow rapidly. In Finland, with the acquisition of
Rasol Oy, Meriaura Group also has a strong market position in solar power
systems.
A
significant increase in demand can be seen in solar power, the main market for
the Renewable Energy business, as well as in large solar thermal systems. In
2022, the solar power production capacity in Finland increased by 63%, reaching
a total capacity of 636 MW. Between 2016 and 2022, the annual capacity increase
has been almost 70% (source: Solar Energy Finland, 2023).
In
solar district heating, Germany is one of the leading countries in Europe. In
2022, the capacity installed in the German solar thermal market increased by
11% from the previous year and was around 496 MW. The growth trend is expected
to continue (source: Solarthermalworld 2023).
According
to Solarthermalworld, currently around 6,000 municipalities, towns or cities in
Europe have a district heating network, but only around 270 of them use solar
heat. The number of solar thermal plant development projects for district
heating production is currently at a record high.
The
market for solar thermal systems producing industrial process heat is also
expected to grow. In 2023, around 150 MW of production capacity was under
development in Europe. So far, most solar thermal systems have been relatively
small, but the size of plants has grown significantly in recent years. Meriaura
Energy has already delivered systems with a capacity of more than 10 MW, and
the scale of plants is expected to continue to grow. The operating model in
which the developer is an investor with a long-term heat sales contract with an
industrial plant has become more common in recent years and supports the use of
solar heat in industry.
-Meriaura Group´s Financial statement release 2023 on 1st March 2024
Meriaura’s vessels are involved in the tramp trade in Europe, mainly in the Baltic Sea and the North Sea. Meriaura specialises in
the maritime transport of industrial products and raw materials (bulk cargo) and the transport of demanding special cargo. Bulk cargo is a competitive sector where the market participants range from large multinational companies
to small regional operators. Around 75% of Meriaura’s revenue comes from bulk cargo, and around 25% comes from cargo and project shipments requiring special expertise.
The demand for maritime transport is affected by general economic development, and the industry has historically been rather volatile. Currently, geopolitical tensions are causing high volatility in ship fuel prices. In addition, operational costs have risen exceptionally strongly as a result of inflation, and the price of equipment has remained high.
Despite the deterioration of the general economic situation, the company considers its outlook for 2024 to be good. The
demand for dry cargo transport is expected to vary by product group. However, Meriaura’s contracts mainly consist of the transport of commodities that are not particularly sensitive to business cycles, such as fertilisers, grain, feed raw materials, renewable energy raw materials and minerals. The bulk business is largely based on annual contracts. Meriaura estimates that around 70–75% of its bulk transport volume and revenue will come from contract customers in 2024, and that the freight level of contract transport will remain stable throughout the contract period. Spot sales, which are more difficult to
predict, play an important role in optimising transport and ship utilisation rates.
The demand for project transport suitable for the type of equipment operated by Meriaura has remained good. The planning horizon of project shipments is considerably longer than in the bulk business, and the existing order backlog is a good starting point for the fleet for 2024. The demand for heavy special transport is expected to remain strong even in the longer term as
a result of investments in renewable energy, among other factors.
Recycled biofuels
Biofuels are generally regarded as a cost-effective and environmentally friendly alternative to oil and other
fossil fuels. Most recycled biofuels are used as transport fuels, but they can also be used for heating and
electricity production. The use of biofuels is expected to increase as their prices decrease as a result of research
and development and their supply is commercialised. The growth is supported not only by emission targets,
but also by their Finnish origin, which reduces dependence on imported oil. Various regulations and tax
incentives to support the use of biofuels are also expected to increase the demand for biofuels in the transport
sector around the world. Currently, the most significant challenge in increasing the use of biofuels is the
availability of suitable raw materials.
-Meriaura Group´s Financial statement release 2023, 1st March 2024