Fingrid and Gasgrid Finland’s to explore the possibilities of hydrogen economy and analyse its effects on the Finnish energy system
In their joint project, Fingrid and Gasgrid Finland explore the possibilities of a hydrogen economy and analyse its effects on the Finnish energy system.
The scenarios of the joint project have been completed, in which hydrogen production will become the largest user of electricity, while wind power will be the number one form of electricity production. The scenarios examine alternative development paths for hydrogen production and consumption as well as the role of energy transfer as an enabler of the development.
Three different hydrogen economy scenarios have been created in the cooperation project between the Finnish gas transmission network operator Gasgrid and Finland’s transmission system operator Fingrid which started in the spring of 2021. In the scenarios, Finland is expected to develop into a significant producer of clean hydrogen gas and/or Power-to-X products. Power-to-X means the conversion of electricity into new products, such as energy products and chemicals.
According to the scenarios, a hydrogen transmission network that enables exports of clean hydrogen gas to Northern Sweden and/or Central Europe will be built in Finland. In all scenarios and in line with the Finnish government’s resolution, Finland’s market share will increase to more than 10 percent of clean hydrogen produced in the EU by 2030.
“Achieving Finland’s hydrogen target requires substantial investments in both electricity and hydrogen networks. Leading position in the European hydrogen economy requires streamlining permitting processes of transmission networks, and strong political and social support for projects” says Mikko Heikkilä.
In all scenarios, hydrogen production becomes the largest user of electricity, while wind power becomes the number one form of electricity production. Finland’s inexpensive onshore wind generation creates good conditions to produce clean hydrogen. Finland’s electricity consumption will almost double from the current level in the 2030s and will continue to grow, mainly because of the electricity needed for clean hydrogen production. The use of clean hydrogen has significant growth potential in several energy-intensive industrial sectors. In oil refining, the steel industry and the chemical industry, emissions can be reduced significantly through the use of clean hydrogen.
Energy transfer needs will increase significantly when the production and consumption of both electricity and hydrogen are distributed across Finland. The energy required by the hydrogen industry can be transferred either as electricity, as it is done today, or, in the future, partly also as hydrogen, as described in the scenarios. This requires the development of electricity transmission and hydrogen transmission infrastructure to meet customer needs. Gasgrid and Fingrid see joint planning as crucial for the development of a cost-effective energy system.
Hydrogen transmission infrastructure contributes to the emergence of a competitive hydrogen market. The hydrogen network is expected to connect several hydrogen producers and consumers and enable open trading within the network. Extensive competition would bring efficiency and risk management benefits to operators compared to a situation where each hydrogen user produced and stored the hydrogen they need locally at their consumption point.
“The hydrogen network will connect producers and consumers not only within Finland but across Europe. Gasgrid is strongly involved in a number of hydrogen infrastructure development projects around the Baltic Sea. With the projects, Gasgrid also strengthens Finland’s pioneering role in the energy future and its attractiveness as a candidate for industrial investments,” says Sara Kärki.