Finland has been pushing the hydrogen agenda. Is this just a vision, or a technology with real potential? This question was explored at CGI's Ratkaisu ’21 event*, held virtually this year.
Hosted by CGI's Business Director in Finland, Riku Rokala, the panel discussion highlighted perspectives on the opportunities of the hydrogen economy and the impact on companies' business and Finland's competitiveness.
Jarmo Partanen, Professor of Electrical Engineering at the University of Applied Sciences (LUT), provided an academic perspective on the exchange of ideas.
In the hydrogen economy, green hydrogen is produced with renewable energy sources. Production of green hydrogen would require a significant increase in emission-free electricity production in Finland. Wind power is the main raw material for green hydrogen.
By using carbon dioxide from the forest industry, hydrogen can be synthesized to produce, for example, synthetic methanol and methane for fuel or usage in the chemical industry. Demand for these products is expected to grow as the electrification of air transport, for example, seems unlikely.
"Key in the solution is regulation in line with climate targets, which will drive the market and influence what will happen in the big picture," said Partanen.
Green hydrogen brings growth and competitive advantage
Neste is committed to carbon neutrality by 2035, which drives the need for clean hydrogen. Neste's production processes already use so-called gray hydrogen, which is made from natural gas, this still releases a lot of carbon dioxide.
Future options include the capture and storage of CO2 emissions (blue hydrogen) and the construction of a dedicated electrolysis plant to produce green hydrogen.
"Green hydrogen will provide the desired environmental benefits and will make products more environmentally friendly. By reducing the carbon intensity of the products, they will also bring a better return on investment. These choices are driven by both commercial and sustainability considerations," said Outi Ervasti (VP, Renewable Hydrogen and PtX at Neste.
The hydrogen economy and the achievement of emission targets that support it are high on the political agenda in the EU. Finland has made a slower start than Central European countries, but with government support, it is possible to close the gap. It will also be boosted by a business-driven national hydrogen cluster.
"Investment is still a real challenge and it is difficult to implement without subsidies. In terms of demand, emerging markets need regulation for the time being. At the moment, for example synthetic or PtX fuels are more expensive than biofuels," said Ervasti, who chairs the hydrogen cluster.
Harnessing national strengths
Sustainable energy production such as windpower requires energy transmission and storage solutions, for which green hydrogen offers a large-scale solution. These billion-euro investments are proceeding independently of each other and will provide Finland with an important way to reduce national carbon emissions and also create new export business.
"The cost structure of the hydrogen economy is influenced by the use of the related streams of the hydrogen production, i.e. heat and oxygen. We must also be able to use them to improve the profitability of our operations," reflected Herkko Plit, CEO of P2X Solutions.
Finland has many of the factors required to build a hydrogen economy. There is sufficient wind power, the business sector has experience in using hydrogen and the technology and process industries in Finland are strong. There are also sufficient sources of carbon dioxide in the forest industry for the production of synthetic fuels. A strong electricity transmission network complements the excellent industrial tradition. We must build upon this now to develop new and commercially significant solutions.
"We are looking at billions of euros of investments in windpower over the next ten years. There will be a lot of wind power, but it will not be profitable if the energy produced is not stored on a large scale. You need hydrogen to do this," said Plit.
*Ratkaisu (which means “solution” in Finnish) is an annual gathering hosted by CGI in Finland that draws around 1,000 client executives.
You can listen to the whole debate by downloading the recording (debate in Finnish)