The Feasibility of Green Hydrogen Energy Transition in Finland
Finland is at the forefront of the green energy revolution, exploring the potential of green hydrogen as a key solution to reduce fossil fuel dependency and achieve its ambitious carbon neutrality targets. As the country harnesses its abundant renewable resources, the journey toward establishing a viable hydrogen-based economy presents both opportunities and challenges that require strategic planning, policy support, and technological advancements.
Definition and Characteristics of Green Hydrogen
Green hydrogen is a versatile, emission-free energy carrier produced using renewable energy sources, such as wind, solar, or hydropower, to power the electrolysis process that splits water molecules into hydrogen and oxygen. This process results in a clean fuel with a near-zero carbon footprint, making it a promising alternative to traditional fossil fuels.
The production of green hydrogen primarily relies on two established technologies: Proton Exchange Membrane (PEM) electrolysis and Alkaline Electrolysis (AEL). While PEM electrolyzes are more efficient and compact, AEL systems are generally more cost-effective. Emerging Solid Oxide Electrolysis Cell (SOEC) technology, which utilizes high temperatures to enhance energy efficiency, also holds promise for further reducing the electricity consumption required to produce green hydrogen.
The environmental benefits of green hydrogen are significant, as it offers a sustainable solution for decarbonizing hard-to-abate sectors, such as heavy industry, long-haul transportation, and energy storage. By replacing fossil fuels with green hydrogen, Finland can effectively reduce its greenhouse gas emissions and contribute to its overarching goal of achieving carbon neutrality by 2035.
Finland’s Energy Landscape and Emissions Profile
Finland’s current energy mix is characterized by a substantial share of renewable sources, including wind, bioenergy, and hydropower, which accounted for over 43% of the country’s total energy production in 2021. This strong renewable energy foundation provides a solid basis for the development of a green hydrogen economy.
However, Finland still faces the challenge of reducing its greenhouse gas emissions to meet its ambitious climate targets. The country aims to become carbon neutral by 2035, necessitating a concerted effort to decarbonize its energy, industrial, and transportation sectors. Green hydrogen can play a pivotal role in this transition, offering a versatile solution to displace fossil fuels and support Finland’s path toward a sustainable future.
Hydrogen Production Capacity and Infrastructure in Finland
Finland’s journey toward a green hydrogen economy is still in its early stages, with a limited number of existing hydrogen production facilities. The country’s hydrogen infrastructure, including storage and transportation capabilities, remains underdeveloped, posing significant challenges for the large-scale deployment of green hydrogen.
To address these infrastructure gaps, Finland has launched initiatives, such as the establishment of “hydrogen valleys,” which aim to foster collaboration among industry stakeholders, research institutions, and policymakers to accelerate the development of the necessary infrastructure and technological advancements.
Opportunities for Green Hydrogen Deployment
Green hydrogen presents a diverse range of applications in Finland, with potential use cases spanning various sectors. In the energy sector, green hydrogen can be utilized for power generation, long-term energy storage, and the decarbonization of district heating and cooling systems. The transportation sector can also benefit from the adoption of green hydrogen, particularly in heavy-duty vehicles, such as buses, trucks, and ships.
Furthermore, the industrial sector, which accounts for a significant portion of Finland’s greenhouse gas emissions, can leverage green hydrogen as a sustainable feedstock for processes like steel production, petrochemical refineries, and ammonia synthesis. By integrating green hydrogen into these energy-intensive industries, Finland can drive forward its decarbonization efforts and position itself as a leader in the green energy transition.
Regulatory and Policy Framework in Finland
Finland’s commitment to the green energy transition is reflected in its existing policy framework and strategic initiatives. The country has introduced various support mechanisms, including subsidies and financial incentives, to stimulate the development of the green hydrogen sector.
In 2020, Finland launched its national hydrogen program, aligning with the European Union’s goals to produce and import 20 million tons of green hydrogen by 2030 and expand electrolyzer capacity to 40 GW by 2050. This program aims to establish Finland as a leading producer of green hydrogen by 2035, further strengthening the country’s energy security and contributing to its carbon neutrality targets.
While these policies and support measures provide a favorable environment for the growth of the green hydrogen industry, regulatory barriers, such as permitting processes and grid integration challenges, still need to be addressed to streamline the deployment of hydrogen projects and infrastructure.
Stakeholder Engagement and Social Acceptance
The successful transition to a green hydrogen economy in Finland requires the active engagement and collaboration of a diverse set of stakeholders, including policymakers, industry players, research institutions, and the general public.
Fostering strong partnerships among these stakeholders is crucial for aligning strategic priorities, sharing knowledge, and mobilizing the necessary resources to overcome the technical and economic hurdles associated with green hydrogen deployment. By engaging in open dialogues and co-creating solutions, Finland can build momentum and garner widespread social acceptance for the integration of green hydrogen into its energy landscape.
Technical and Economic Feasibility Assessment
The feasibility of green hydrogen in Finland is closely tied to the cost of production, which is primarily driven by the capital expenditures (CAPEX) for electrolyzers and supporting infrastructure, as well as the operating expenses (OPEX) related to electricity consumption and maintenance.
At the current electricity price of €0.059/kWh in Finland, the production of green hydrogen via PEM electrolysis can incur a significant electricity cost of approximately €3 per kilogram, making it challenging for green hydrogen to compete with conventional fossil fuels without appropriate policy support and subsidies.
However, advancements in technology, such as the SOEC system’s ability to reduce electricity consumption, combined with the anticipated decline in renewable energy prices, are expected to improve the economic viability of green hydrogen production in Finland by 2030. Sensitivity analyses and risk assessments can help identify the critical factors that will shape the techno-economic feasibility of this energy transition.
Roadmap for Green Hydrogen Transition in Finland
To achieve a successful green hydrogen transition, Finland must develop a comprehensive roadmap that outlines clear milestones, targets, and coordinated efforts across various sectors. This roadmap should address policy and regulatory measures, investment in infrastructure, technological advancements, and stakeholder engagement strategies.
Policy and regulatory actions, such as the introduction of carbon pricing mechanisms, targeted subsidies, and the streamlining of permitting processes, will be crucial in creating a conducive environment for the large-scale deployment of green hydrogen. Simultaneously, investing in the development of hydrogen storage, transportation, and distribution infrastructure will be essential to support the growth of the hydrogen economy.
By fostering collaborative partnerships among industry players, research institutions, and policymakers, Finland can leverage its renewable energy strengths, technological expertise, and innovative spirit to position itself as a leader in the green hydrogen revolution and contribute to the European Union’s ambitious decarbonization goals.
The feasibility of Finland’s green hydrogen energy transition is contingent upon overcoming the technical and economic challenges, while aligning strategic policies, mobilizing investments, and securing widespread social acceptance. As the country continues to navigate this complex journey, its ultimate success will hinge on its ability to harness the vast potential of green hydrogen as a pivotal component of its sustainable energy future.