Finland and Sweden to be built into a single hydrogen economy

Press release from BotH2nia

Finnish companies, municipalities and other hydrogen actors are currently setting up a joint hydrogen economy area with their Swedish counterparts in the BotH2nia project. This cooperation is needed to ensure that the northern end of the Baltic Sea becomes a strong hydrogen economy region that provides jobs and prosperity in a sustainable way. Thanks to cheap wind, solar, hydro and nuclear power, Finland and Sweden have exceptional opportunities.

A hydrogen economy built around a hydrogen pipeline

Gasgrid Finland and Nordion Energi are currently exploring the possibility of building a hydrogen gas pipeline, the Nordic Hydrogen Route, across the border between Finland and Sweden. The hydrogen infrastructure – gas pipelines and associated facilities – would extend from Vaasa via Oulu, Tornio, Luleå and Umeå to Örnsköldvik. In addition, a pipeline would run from Luleå to the Kiiruna region.

At the moment, it seems that the pipeline will be built and built as quickly as possible. A huge amount of hydrogen-related investment is already planned along the pipeline route. Published plans for investments along the pipeline route include:

• Vaasa, EPV Energia, hydrogen, investment worth €35 million
• Mustasaari, Westenergy, hydrogen and methane, worth €90 million
• Kokkola, Flexens, hydrogen and ammonia, worth €500 million
• Raahe, SSAB, iron sponge steel from hydrogen in Kiiruna, worth €2000 million
• Luleå, HYBRIT/SSAB, iron sponge steel from hydrogen in Kiiruna, worth €2000 million

• Luleå, Botnialänken H2, hydrogen primarily for shipping
• Luleå, HYBRIT, underground hydrogen storage for 100 000 – 120 000 cubic metres of compressed hydrogen
• Luleå, Fertiberia, hydrogen and its ammonia, worth €1000 million
• Boden, H2 Green Steel, hydrogen steel, 5 million tonnes per year
• Gällivare, HYBRIT/LKAB, iron ore to iron alloy using hydrogen
• Örnsköldsvik, FlagshipONE, Hydrogen to methanol, capacity 50 000 tonnes of methanol per year

Hydrogen pipelines to increase own hydrogen industry and export of surplus hydrogen

There are also a number of other hydrogen projects in Finland and Sweden, and other hydrogen pipeline networks are on the way. In time, all potential hydrogen pipelines in Finland and Sweden would be interconnected and linked to hydrogen pipelines to other countries. The benefits are already growing as the whole of Finland and Sweden will be included in the same hydrogen economy area, together with the hydrogen industry from other countries such as the Baltic States, Poland, Germany, Denmark and Norway.

Hydrogen pipelines are important because they will allow both Finland and Sweden to build more hydrogen processing and utilisation industries, in addition to the possibility of selling surplus hydrogen abroad.

Always more likely to get cheap hydrogen from somewhere

Hydrogen production and utilisation companies need a large hydrogen market to operate cost-effectively. A common market will smooth the price of hydrogen, making the business environment more predictable.

In the future, hydrogen will be produced mainly from water using renewable electricity, with wind and solar power generation varying with the weather. With a hydrogen pipeline connecting wind farms at least from Kiiruna in Sweden to Vaasa in Finland, and probably much further, there will always be enough wind somewhere to produce cheap hydrogen.

Hydrogen pipeline gives a head start to ammonia and methanol producers

The hydrogen economy is becoming a hotbed for the production of synthetic fuels and chemicals. Even if a plant producing ammonia, for example, produces its own hydrogen, it makes sense to connect the plant to other hydrogen producers by pipeline. When electricity is not available cheaply and in sufficient quantities for the plant in the local area, the plant can temporarily buy hydrogen produced with cheap energy from further away for its own use. Similarly, when a sufficiently good price for the hydrogen produced elsewhere is available, it may be worthwhile for a synthetic fuel producer to sell its hydrogen to others through the pipeline.

A common market will keep hydrogen prices more stable. It also avoids the need to build expensive and difficult to operate hydrogen storage facilities in too many places. When the hydrogen storage area covers the entire Baltic Sea, Finns will also have access to low-cost salt marshes that are well suited for hydrogen storage through hydrogen pipelines.

Certainty for wind power investments

A common hydrogen market built around the hydrogen pipeline will provide certainty for investment in renewable energy. It is easier to put your money into building a wind farm if you can be sure that the energy produced will always be traded somewhere – if not directly as electricity, then in the form of electrically produced hydrogen. While consumers rejoice every time the price of electricity falls into negative territory, every negative moment also puts the brakes on new wind farms.

A lot of new wind power is now coming up in Finland. Finland’s all-time electricity consumption record of 15 GWh/h was set in 2016. The maximum capacity of wind power plants currently in operation is just over 5 GW. Fingrid estimates that by 2030, the maximum capacity of wind power plants in Finland will already exceed 20 GW and that Finland is not in the process of decommissioning existing nuclear power plants, for example.

For Finland to attract investors to invest at this rate in wind farms that also generate tax revenue, there must be a demand for additional energy – either in the form of electricity or hydrogen. Excess electricity should always be traded, either to the opposite shore of the Baltic Sea or even further afield in the form of hydrogen.

Renewable electricity to be built in excess of our needs

Wind and solar power must be built in excess of the electricity needed by industry. All wind and solar power plants rarely produce the maximum amount of electricity due to weather fluctuations. For industry to know that cheap electricity is sufficient even on a windless grey day, power plants need to be built well above their maximum capacity. This in turn automatically leads to overproduction of electricity on good windy days. And even when wind and sun produce a lot of electricity, the investor in electricity generation must get a return on his investment. This is achieved by selling the excess electricity or the hydrogen made from it – even to a neighbouring country that needs it. On a bad electricity day, exports can be flexible.

Electricity best transported to nearby areas as electricity, far away in large quantities as hydrogen

Using electricity to make hydrogen is a good alternative to exporting electricity directly. It is best to always use electricity locally as direct electricity, as this avoids losing electricity for energy conversion to hydrogen. However, if large amounts of energy have to be transported over long distances, the results of the profitability calculations may change.

Although the production of hydrogen takes up some of the energy produced, building pipelines for large amounts of energy can be so much cheaper than laying power lines. Over long distances, transporting energy in gaseous form can be 2-4 times more cost-effective than transporting it as electricity, and even better when done at sea. Therefore, it makes sense to bring a single economic area on hydrogen pipelines.

Gas infrastructure also takes up much less space than the electricity grid. One metre diameter buried gas pipeline could carry all the energy to be transmitted between southern and northern Sweden, compared to many parallel 420 kilovolt power lines.

Industry needs subcontractors

A common hydrogen economy is needed because today’s industrial plants only make a small part of everything they need for production themselves. Even the maintenance of factories, from cleaning to maintenance, often relies on subcontracting chains. Large companies need small and medium-sized enterprises with a knowledge of the hydrogen economy as partners. The indirect effects go even further, as subcontractors also need to provide their own services.

A good example of the size of supply chains is the automotive industry in Germany. The German Ministry of Economic Affairs estimates that the automotive industry directly employs around 800 000 people in Germany. But if you add up all the people employed indirectly by the automotive industry in Germany, the number of people in the workforce rises to over 7 million, meaning that one in seven Germans earns their living from the automotive industry.

While the hydrogen industry wants to grow rapidly in Luleå and Kokkola, growth will slow down significantly if there are not enough subcontractors. The better the companies in Kemi offer their services to the factories in Luleå and the companies in Umeå to Kokkola, the better and more secure the growth for all. Once again: prosperity, jobs and tax revenue for both countries.

Original article published in Finnish on LinkedIn at https://www.linkedin.com/pulse/suomi-ja-ruotsi-rakennettava-yhdeksi-visa-noronen

Originally published on 7 February.

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