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A reliable electricity grid gives Finland a competitive edge

The green transition in the power system will herald a new era of clean industry in Finland, and the presence of major industrial electricity consumers in the country ensures a positive return on renewable energy investments.

The renewal of the power system is hugely significant for our business,” says Outi Ervasti, Vice President, Renewable Hydrogen at Neste.

Neste will need much more electricity in the future, as its climate and business strategy calls for hydrogen production using renewable electricity. The company aims to make its production entirely carbon-neutral by 2035.

Hydrogen produced using renewable electricity holds an important position in Neste’s climate and business strategy.

“It is important to us that more renewable electricity production facilities are built, and Fingrid makes an important contribution to this by expanding the main grid in line with the electricity supply and demand. We will also need to take action to accommodate our future electricity needs. For example, we will need to increase the transmission capacity of the connecting line to the Kilpilahti industrial area,” says Ervasti.

She says Neste must become more closely integrated into the electricity market and the entire electricity value chain.

“Large-scale process industries need a continuous power supply – refineries cannot shut down momentarily if the wind stops blowing or the sun stops shining. We are now thinking about the best ways of responding to large fluctuations in production in the future electricity market.”

“Our company will need even more electricity in the future, and it is important for us that more renewable electricity production facilities are built,” says Outi Ervasti, Vice President, Renewable Hydrogen at Neste.

Cooperation that everyone benefits from

Outi Ervasti thinks Finland is well-positioned to pioneer the exploitation of renewable energy.

“A strong power system enables cost-effective, large-scale solutions. I hope green hydrogen will also be used in Finland – primarily in high-grade industrial processes – instead of just exporting electricity or hydrogen to competitive markets in Central Europe. We should keep the added value in Finland,” she emphasises.

The green transition will enable industrial renewal and entirely new businesses based on large-scale sector integration.

“When we make hydrogen, others will be able to exploit the heat and oxygen generated by the process.”

The green transition will also enable economic growth:

“However, cooperation is essential – we can create new business opportunities where everyone wins. Investments must also be financially viable, and businesses need to learn to acquire funding. Startups, in particular, need more than just a good idea – they also need to be able to sell it to financiers.”

Flexible hydrogen production

Nordic Ren-Gas Oy, a project development company established in 2021, focuses its operations on the green transition and EU emission reduction targets.

Ren-Gas got off the starting grid thanks to funding from venture capitalist Ilkka Herlin. At the end of last year, Allianz, a German company, took a minority stake in the company.

“Flexible hydrogen production supports investments in renewable electricity production and the electricity network,” believes Saara Kujala, CEO of Ren-Gas Oy.

The company is developing production plants based on three main technologies.

Electrolysers use wind-generated electricity to break down water into hydrogen and oxygen, as Neste intends to do. The waste heat generated in this process is fed into the district heating networks of Ren-Gas’s partners in the energy distribution business.

Ren-Gas also recovers the carbon dioxide from the flue gases of its partners’ power plants. The company builds its production plants next to Finnish power plants – for example, it is planning a plant in Tampere next to the Tarastenjärvi waste-to-energy plant.

The third technology is synthesis, which uses hydrogen and carbon dioxide to create methane with exactly the same chemical composition as biogas for transport and fossil natural gas.

“We are currently developing plants in five locations, going through permit processes, and concluding business agreements. We are awaiting investment decisions in Tampere and Lahti towards the end of the year,” says Saara Kujala, CEO of Ren-Gas.

Nordic Ren-Gas plans to operate in the electricity flexibility market.

Ren-Gas also plans to operate in the electricity flexibility market – flexibility is naturally in demand throughout the EU.

“We hope the flexibility market will provide us the price signals to indicate that there is demand,” Kujala says.

In addition, Ren-Gas has modelled the electricity price trend under various scenarios, depending on whether Finland has flexible green hydrogen production.

“If there is no renewable hydrogen production, the electricity price will likely remain low. The price of wind power would then be even lower, carrying the risk of investors deciding against investments in renewable electricity generation. Flexible hydrogen production supports renewable electricity production investments and the electricity grid.”

Finland is reindustrialising thanks to carbon-free electricity

Markku Kivistö, toimialajohtaja, Business Finland

Markku Kivistö, Head of Industry, Cleantech, Invest In, Business Finland, is responsible for foreign cleantech investments in Finland. His clients are foreign industrial operators looking for a suitable base in the European market.
“Maximising the amount of carbon-free energy production will lay a strong foundation to build new Finnish industries, expertise, innovations, and wellbeing,” Kivistö says.

He mentions three focuses: a battery value chain working on the principles of sustainable development, the production of hydrogen and its derivatives, and CO2-free industrial production.

“Industrial carbon emissions can be reduced if clean energy is available, transmitted, and stored. Low electricity prices, investments in the functioning of the main grid, and a uniform price area are competitive advantages that will attract investments to Finland.”

At the same time, Finland is reindustrialising.

“This is a unique opportunity to foster the growth of Finnish industry. We have the opportunity for more than EUR 100 billion in investments, EUR 100 billion in exports, and jobs for 100,000 people. This is also a part of the European Green Deal – the achievement of climate targets. We offer solutions to combat the energy crisis and climate change.”


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