Finland is charged up about the green transition

Last year was a year of many dubious records. Parts of Greece were scorched by the largest wildfires ever in the EU. Pakistan saw one-third of its land submerged after torrential rains. The Earth was hotter than ever before, with the global mean temperature nearly hitting the critical threshold of 1.5 degrees centigrade above pre-industrial levels.

Such events have reminded countries of the need to accelerate the green transition also amid geopolitical uncertainties.

While Finland is one of them, its commitment to climate action dates back much further. In 1990, it became the world’s first country to levy a tax on carbon dioxide emissions, an early precursor to its ambitious pursuit of carbon neutrality by 2035.

Finland has also made a noteworthy shift toward clean energy. More than 90 per cent of the energy it generates is already carbon neutral; yet, it has set its sights on doubling clean energy production to build a more robust and sustainable foundation for economic growth.

The building blocks are being put in place across Finland.

Vaasa, a city on the west coast of Finland, has emerged as the leading electrification ecosystem in the country, hosting a cluster of companies that includes ABB, Danfoss, Hitachi and Wärtsilä. It is also the site of Vaasa EnergyWeek, an event that this year delved into batteries, hydrogen, natural gas, wind, storage solutions and other critical areas of the energy transition.

Minna Martikainen, rector at the University of Vaasa, stated last month at the event that new exports emerging from the green transition will be a prerequisite for not simply surviving but succeeding in the face of global competition.

“Bigger investments are needed especially in areas that are important for sustainable business growth, the green transition and competence-based security of supply,” she underscored.

Martikainen also identified fostering international expertise through education as a vital means to secure access to skilled labour and fuel economic growth. Another important measure, she added, is to promote research co-operation between businesses and universities.

Hydrogen: a key fuel and medium

An example of industry-academia co-operation is Hydrogen UnderGround, a research project coordinated by Geological Survey of Finland (GTK) and VTT Technical Research Centre of Finland. Bringing together 16 industrial partners, the project – as its name hints – focuses on the role of underground hydrogen storages in ensuring a stable supply of what is billed to be both a key fuel and energy-storage medium.

High costs and safety risks make storing the fuel above ground impractical.

The goal is to lay the foundation for a large-scale underground hydrogen storage concept for the business and technology ecosystem emerging around hydrogen, said Pasi Valkokari and Teemu Lindqvist, managers of Hydrogen UnderGround at VTT and GTK, respectively.

“The project also aims to establish pathways for continued research, inviting partner companies to contribute to ongoing advancements in the field,” the duo added.

Helsinki and Tornio are emerging as important hubs in the hydrogen ecosystem.

Helen, the energy utility of the City of Helsinki, in April announced it has made a final investment decision on building the first green hydrogen plant in the city. To be situated strategically near the district heating network and a busy container terminal, the pilot plant will produce around three megawatts of hydrogen a year, mostly for an adjacent refuelling station for heavy-duty transport to be developed in co-operation with Vireon, a subsidiary of Norwegian Hydrogen. The excess heat generated during production will be channelled to the district heating network, raising the plant’s total energy efficiency to over 90 per cent.

“The 3H2 project is the first of its kind in the world, combining four different sectors: electricity, transportation, heating and hydrogen, as well as flexibility between them,” remarked Sari Mannonen, head of new business and hydrogen at Helen.

The plant is scheduled to start production in 2026 and the refuelling station to open in 2027, reducing carbon dioxide emissions by an estimated 3 700 tonnes.

In Tornio, Norwegian Hydrogen has reserved a 20-hectare plot for another green hydrogen plant.

“Tornio emerged as a natural choice, aligning perfectly with our goals. The city’s industrial landscape, coupled with its transport and energy infrastructure, presents an optimal setting for hydrogen production,” noted Petri Luoma, project director at Norwegian Hydrogen Finland.

Green hydrogen is produced by powering an electrolyser, a device that splits water into hydrogen and oxygen, with renewable electricity.

Not all green hydrogen is created equal, however. The efficiency of the process depends on both the amount of energy wasted when converting the power drawn from a power grid and the amount of electricity lost as heat, according to Olli-Pekka Aalto, head of global energy and power at Danfoss. Typically about a third of electric energy used in electrolysis turns to heat.

“We support the growing hydrogen economy by supplying high-quality AC-to-DC converters, which improve the efficiency of hydrogen production and lengthen the life cycle of electrolysers,” he said in March.

Investments incoming, talent and co-operation to follow

Also dozens of other hydrogen-related projects are underway in Finland, according to data from H2 Cluster, an industry-led cluster of almost 100 companies. The activity should delight the central government, given its target of producing 14 per cent of hydrogen in the EU.

Overall, Finland is expected to see investments worth 70–110 billion euros in energy production and transmission by 2040, including 54–94 billion euros in hydrogen production, refining and transport, Sara Kärki from Gasgrid and H2 Cluster, highlighted at Vaasa EnergyWeek. She argued that the country is well positioned to become a key player in the hydrogen economy for a couple of reasons: its ample supply of renewable energy, ability to produce electricity and hydrogen at a competitive cost, reliable and constantly developed electricity grids, and opportunities to create conversion and storage pathways from surplus renewable energy.

“The Baltic Sea region can potentially become the most competitive hydrogen market by 2030,” she predicted.

Scaling up the hydrogen economy will, though, require a broad range of talent from lawyers to scientists, reminded Tuomas Hakala, head of business development at Convion. He also expressed his advocacy for bold experimentation, estimating that imperfect solutions can serve as important steps on the learning curve.

Both Kärki and Herkko Plit, CEO of P2X Solutions, identified co-operation as a critical requirement for the growth, be it as a means to distribute risks, to engage local stakeholders or to ensure the successful conclusion of development projects.

The stakes are extremely high – so high that any debate over who should cough up the necessary funding is of secondary importance, Shakhar Kubal, head of electrification at Danfoss, emphasised at the event.

“[The relevant question is] whether we have a liveable planet in the future,” he stated.

In charge of battery value chain

Batteries are another core technology for driving the green transition, not only as enablers of carbon-free mobility but also as storage solutions that smooth out the variability of renewable energy such as wind and solar power. Demand for Li-ion batteries is, unsurprisingly, forecast to grow globally by over 25 per cent a year to around 4 700 gigawatt-hours by 2030, Frank Bråthen, CEO of Siemens Digital Industries Norway, said at Vaasa EnergyWeek.

Finland is poised to lead the charge in the space, it being the world’s only country capable of managing the entire battery value chain from mineral extraction to recycling.

“[I]n contrast to many countries that are considering key parts of the value chain like increased electrical vehicle use or European based battery production, like its Nordic neighbours, Norway and Sweden, Finland follows a more long-term holistic attitude to the whole battery value chain and different battery chemistries,” described Ben Wilson, a scientist originally from the UK.

Underpinning the approach are diverse expertise and natural resources, including “an army” of more than 300 000 engineers and the largest lithium mines in Europe.

The expertise extends to some rather exotic domains, too: Polar Night Energy is using sand as batteries that store surplus wind and solar energy as thermal energy, a technology that recently drew over 7.5 million euros in seed funding. Teraloop, meanwhile, has been awarded for its modular kinetic energy storage system, which utilises flywheels to slow the degradation of battery cells contributing to rapid-response ancillary markets.

Despite being uniquely positioned also in the battery space, Finland should seize what is certain to be a lucrative and globally appealing market opportunity collaboratively with others in the Nordics and Northern Europe, emphasised Bråthen from Siemens.

Tor Stendahl, managing director of Freyer Batteries Finland, said European permit procedures must be made more predictable and streamlined, viewing that non-compliance is often caused not by lack of willingness but by lack of understanding of the regulatory environment. A continental approach, he added, is required also to offer carrots that counter the hundreds of millions in tax credits pledged under the US Inflation Reduction Act.

With the green transition entailing electrification and data utilisation at unprecedented scale, it places greater emphasis on cybersecurity. Petra Berg, post-doctoral researcher at the University of Vaasa, said humans are simultaneously the greatest shield and vulnerability when it comes to cybersecurity.