While celebrating May Day this year, many people may have missed what could turn out to be a major piece of news for Finland's future.
It was the announcement of a 45-million-euro grant in aid by the EU's European Hydrogen Bank to the Finnish company Nordic Ren-Gas, which aims to build a production plant for renewable fuels in Lahti.
The company was judged to be the most competitive of the hundreds of applicants for funding by the bank.
Janne Peljo, Chief Policy Adviser on Climate and Biodiversity at the Confederation of Finnish Industries (EK), lists the advantages of the Lahti project, which in principle are the advantages of all Finnish hydrogen projects:
- There is a lot of emission-free electricity generation in Finland.
- It is growing all the time.
- The waste heat from the production of hydrogen can be used for district heating in cities.
- Biomass-based carbon dioxide sources are readily available in Finland and are needed for further processing of hydrogen.
- Electricity is relatively cheap.
Of these, the affordability of electricity in particular may sound surprising to the general public when they look at their home utilities bill.
But, for industry it can be described as cheap. "In fact, the price of electricity in Finland was the cheapest in Europe last year," says Petteri Laaksonen, Research Director of the School of Energy Systems Department at LUT University.
The price of electricity plays a key role in the production of hydrogen. The production of green hydrogen, in turn, requires energy produced from renewable resources. More and more renewable electricity generating capacity is being built in Finland all the time.
LUT University has calculated that electricity production in Finland could be increased tenfold.
This has been modelled in the LUT-led Hydrogen and Carbon Value Chains in Green Electrification project, which is just being completed.
"Even with tight constraints, we can produce more than 1,000 terawatt-hours of electricity per year, compared with something like 80 terawatt-hours last year," says Laaksonen.
Finland's competitiveness in hydrogen production is based on the fact that the raw material is cheap and will become cheaper as production increases.
In early May, the Geological Survey of Finland (GTK) published a map showing high concentrations of naturally occurring hydrogen in Finland. "Ready-made" natural hydrogen is much more efficient for energy production than when produced artificially through means such as electrolysis.
"Hydrogen is used to make fuels, plastics, glues and solvents, among other things. However, the needs of the chemical industry are a bigger part than fuels," notes Laaksonen.
Huge amounts of electricity
According to Laaksonen, in the future, electricity will be a raw material for not just for hydrogen production, but for "almost everything".
"Huge amounts of electricity will be needed. In that respect, we have an incredibly competitive advantage. In summer there is a lot of sunshine and in winter there are good winds," Laaksonen points out.
The main competition for the hydrogen industry in Finland and the Nordic countries is found in the Iberian Peninsula, which is able to compete in electricity generation with its focus on solar power.
However, Laaksonen does not consider the competition as particularly fierce.
"Electricity demand will grow on average three to four times over from today's level to feed the needs of the large chemical industry. We need regions capable of producing it. For us, as well as Spain, Portugal and the Nordic countries, this is a tall order," says Laaksonen.
"Green hydrogen production will be seen all over Europe, but Spain, Portugal and the Nordic countries will be particularly competitive. The competition will be mainly between these two big regions," adds Peljo.
Major impact on employment
According to the Confederation of Finnish Industries (EK), there are currently more than 14 billion euros worth of hydrogen projects in the works in Finland. These projects are at different stages, and not all of them will necessarily ever come to fruition.
The hydrogen cluster that they form estimates that, if implemented, they could create as many as 100,000 jobs in Finland by 2035.
The most conservative estimate by LUT University researchers is that tens of thousands of new industrial jobs will be created in the sector.
"We will certainly have to accept work-based immigration. The change over the coming decades will be so great that if the opportunity is taken to the full, we'll start running out of Finnish workers," Laaksonen explains.
"Although Finland may have joined the hydrogen investment race a few years behind our neighbours or competitors, Finland is catching up very well at the moment," says Peljo.
One more key needed
Before the hydrogen industry can fully kick off, there is an issue to be resolved which relates to the downstream processing of hydrogen into fuels such as methanol, and that is the need for a supply of biomass-based carbon dioxide.
According to Laaksonen, the forest industry has been exploring the possibility of producing methanol from biomass-based dioxide, "In practice, biomass-based carbon dioxide comes from pulp mills, and the pulp producers have not yet made a commitment on this issue."
Methanol plays a major role as a basic raw material for chemicals. In Finland, biomass-based carbon dioxide would be widely available. In fact, Finland is probably the second largest producer of biomass-based carbon dioxide in Europe.
Laaksonen calls for an industrial strategy that would enable the hydrogen sector to grow dramatically.
"We are in the same situation as Norway in the 1970s when they discovered oil. When the potential of hydrogen is fully exploited, we will no longer have any worries about the national debt or care for the elderly, or anything else," he argues.
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