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Finland building hydrogen-based economy

Hydrogen is expected to be key for the global transition to green energy systems, as an enabler of efficient renewable energy use and longer-term energy storage.AdobeStock

Many Finnish companies, interest groups and organisations have taken action to assume leadership in the adoption of hydrogen-based solutions, which are expected to be key for the global transition to green energy systems.

P2X Solutions, a Helsinki-based specialist in hydrogen and power-to-X technology, in May announced it is pressing on with the development of its first industrial-scale green hydrogen production plant after receiving an investment of two million euros from Lifeline Ventures.

“Green hydrogen is a key factor in achieving the world’s emissions reduction targets,” stated Herkko Plit, chief executive of P2X Solutions. “We are continuing at full speed as planned, aiming for an investment decision this year and the start of construction of the first hydrogen plant in 2022.”

Lifeline Ventures will provide not only capital but also expertise to the startup, with one of its founding partners, Timo Ahopelto, joining the board of P2X Solutions.

“Hydrogen solutions are being built around the world in all energy sectors, production, storage and distribution. Hydrogen will likely become a big part of the green energy of the future. This company has a concrete solution and a very experienced team in place,” he attested.

News of the investment came less than a week after the startup reported it has signed a front-end engineering design agreement for the plant with Sweco, a Swedish engineering and architecture consultancy. The design will encompass technical design, permit review, plant location, and specification and tendering for key equipment for the 50 million-euro plant.

“Finnish industry has all the prerequisites to be a pioneer in a greener electric future,” believes Matti Vaattovaara, CEO of Hitatchi ABB Power Grids. Image: Hitatchi ABB

The project is expected to be wrapped up by year-end, paving the way for the plant to become operational in 2024. The plant is set to be replicable also in other parts of the world.

P2X Solutions has tapped Hitachi ABB Power Grids as the electrification partner of the project. Hitatchi, it stated earlier this spring, will take responsibility for power system solutions ranging from the power grid to electrolysis equipment, including the substation, medium-voltage distribution, power-quality optimisation, and requisite control and safety systems.

As the process of using electricity to split water into hydrogen and oxygen, electrolysis produces low-carbon hydrogen as long as the electricity is from renewable sources.

Hydrogen is regarded as a key facilitator of green energy use on account that it can balance the supply-and-demand imbalances arising from the increasing use of renewable electricity. Image: AdobeStock

“Electricity is a key factor in the production of green hydrogen, and a cost-effective and high-efficiency electrification solution is central to competitive hydrogen production on an industrial scale,” said Matti Vaattovaara, chief executive of Hitatchi ABB Power Grids in Finland.

“Finnish industry has all the prerequisites to be a pioneer in a greener electric future, of which this project is an excellent example.”

Looking for a niche

This potential, along with the need for coordination to realise it, has been recognised at the national level. The Technology Industries of Finland in April reported that three dozen companies, from startups to multinational corporations, have joined a cluster founded to support the hydrogen-based economy and the exports of hydrogen-based solutions in Finland.

The cluster will present its members an opportunity to build networks and take advantage of the tens of billions of euros in investments that are to be made in hydrogen-based technologies in Europe in the wake of the EU Recovery and Resilience Facility.

“We want to identify the technological skills and capabilities with which Finland can differentiate and support the kind of collaboration that spawns new solutions for exports,” outlinedSimo Säynevirta of ABB, one of the larger members of the cluster.

“This helps us to develop our own offering during project preparations with European partners.”

Negotiations are already underway with clusters in the Baltics, Germany, Poland and Sweden. Finland and Sweden, for example, have joined forces on a project called BotH2nia, which aims build a northern hydrogen hub along the Gulf of Bothnia.

Outi Ervasti of Neste has been named the chairperson of a hydrogen cluster consisting of 36 Finnish companies looking to open doors to European hydrogen networks. Image: Neste

“We need plenty of co-operation and innovativeness to develop the big picture that’s needed,” Outi Ervasti of Neste, chairperson of the Finnish cluster, stressed at the launch event of BotH2nia in April.

The cluster began its work by charting the ongoing hydrogen-related projects in Finland. The projects, it found, are linked to various parts of the value chain: from production and industrial use to transport and processing, and the development, manufacture and commercialisation of technologies for processing hydrogen.

“We are talking about investments of about one billion euros, which are estimated to reduce emissions annually by four to six million tonnes of carbon dioxide,” said Sakari Kallo of SSAB.

Hydrogen is generating interest due to the belief that it will have a critical role in decarbonising energy systems and entire societies. Hydrogen Roadmap Europe fixes the belief in three core arguments: hydrogen is the best choice for at-scale decarbonisation in some segments of buildings, industry and transport; hydrogen has a systemic role in the energy transition by providing a mechanism to flexibly transfer energy across sectors, time and space; and hydrogen offers convenience by ensuring the switch to greener solutions requires minimal adaptation from consumers.

For example, it can make use of existing gas grids, salt caverns and depleted gas fields to store energy for longer periods at low cost, as well as offer motorists the same range and refuelling speed as combustion-engine vehicles.

The chemical element has duly been identified as a key component of also the energy and climate strategy of Finland. Business Finland last year presented a national hydrogen roadmap to consolidate various sectoral roadmaps and develop a broader view of the role hydrogen will have in the society-wide pursuit of carbon neutrality and carbon negativity.

Hydrogen is a promising decarbonisation option for transport segments where the lower energy density, high initial cost and slow recharging performance of batteries are disadvantages. Image: AdobeStock


The roadmap identifies activities such as synthetic fuel, low-carbon hydrogen and low-carbon steel production as opportunities for Finland.

The International Energy Agency (IEA) in June 2020 pointed out that further action is required to reach the 7.92-megatonne target it has set for annual low-carbon hydrogen production capacity by 2030, as part of an effort to deliver on three energy-related sustainable development goals. Electrolytic hydrogen presently accounts for less than 0.1 per cent of dedicated hydrogen production worldwide, meaning the rising demand for hydrogen continues to be satisfied largely with fossil fuels.

With the cost of renewable electricity declining, the interest in electrolytic is soaring.

“As a small country, Finland cannot be the world leader in the entire value chain,” acknowledged Helena Sarén, head of Zero Carbon Future mission at Business Finland. “Identifying parts of the value chain where we can have a major role in the future is important.”

Article was originally published in June 2021.

By: Aleksi Teivainen