US hydrogen equipment-maker Plug Power has unveiled plans to build three green hydrogen projects in Finland with a total electrolyser capacity of 2.2GW, for export as green hydrogen-derived ammonia, green steel and liquid hydrogen, in the hope of leveraging Finland's low-carbon grid for a smoother ride with EU regulators.
By locating the projects in Finland, where the power grid is dominated by nuclear, renewables and hydroelectric power, Plug appears to be aiming to streamline the administrative burden of meeting the EU’s stringent rules on what constitutes green hydrogen — and likely ease access to subsidies — but will still need to prove to regulators that it is using renewable energy instead of nuclear.
The three proposed projects, located in the ports of Kokkola and Kristinestad, on Finland’s western coast, and Porvoo on its south coast, are all slated for commissioning by 2030, with final investment decision (FID) scheduled for 2025/2026.
All the envisage the use of Plug’s proton exchange membrane (PEM) electrolyser technology.
The 1GW electrolyser proposal for Kokkola would produce 85 tonnes per day of liquid hydrogen (31,025 tonnes per year if used 100% of the time) using Plug’s liquefaction technology, as well as 700,000 tonnes of green ammonia.
The liquid H2 (LH2) element has the potential to be a problem for Plug as it is currently embroiled in a lawsuit with Texas-based firm JTurbo Engineering & Technology, which has accused the New York-based giant of stealing its liquefaction technology as part of Plug’s buyout of a third company — situation on which Plug has declined to comment.
The green ammonia and some of the liquid hydrogen would be exported from Kokkola's deep port, with the remaining LH2 supplied to domestic customers.
The liquid H2 plan is the second proposal to be floated for Kokkola this week, following Finnish company Flexens’ announcement on Monday of a 350MW electrolyser project at the port to produce green hydrogen and green ammonia for use in fertiliser production as part of a wider “hub” proposal for the region.
Flexens, which is 49% owned by French green hydrogen developer Lhyfe, noted that Kokkola already handles ammonia in its capacity as an existing centre for industrial chemicals.
Plug’s second proposal would see a 1GW electrolyser installed at the port of Kristinestad, producing enough green hydrogen to make 2 million tonnes of direct reduced iron (DRI) or hot briquetted iron (HBI) per year, for export for use in the manufacture of green steel.
DRI is a type of 'sponge iron' — pure iron chemically extracted from iron ore using green hydrogen — that is essential to steelmaking and is currently the only zero-carbon alternative to the conventional fossil fuel-based method of sponge iron production used today.
But DRI can be unstable in ambient atmosphere unless it is compressed into small blocks, where it is known as HBI, for easier transport over long distances.
The third and last project — a 200MW scheme in Porvoo — envisages 100 tonnes per day of green hydrogen production for local use in the mobility sector, with some injected into Finland’s gas export pipeline to Estonia.
The New York company would be supported with the ammonia plants by German project developer Hy2Gen, which is backed by pure play hydrogen investor Hy24, while the DRI plant would be developed in conjunction with France-based green steel consortium GravitHy, in which Plug Power is a founding member.
Plug Power’s chief executive Andy Marsh told Reuters that the company had spent two years searching for suitable locations for the project, before deciding upon Finland because of its grid make-up.
“When you look at the Finnish grid, it's 87% renewable already,” Marsh told the news agency. “That really makes it much simpler and straight-forward to generate green hydrogen.”
But Marsh, who is likely referring to EU rules mandating what constitutes green hydrogen, is not correct that Finland’s grid is 87% renewable.
Around a third is produced from nuclear power, according to the International Energy Agency (IEA).
In fact, Finland’s grid is currently only about 52% renewable, according to data site Nowtricity, due to the bioenergy and waste, hydroelectric and wind capacity in its power mix.
Under the EU’s strict additionality rules, green hydrogen can only be produced from “additional” renewable energy capacity — defined by the bloc as capacity that is less than three years old — unless the project can prove that it can match green hydrogen production to additional capacity on a monthly basis until 2030.
There are two exceptions to this rule: if hydrogen is being produced in an area where the grid receives more than 90% of its electricity from renewables, for which Finland does not currently qualify, or when the emissions intensity of electricity in a bidding zone is lower than 18 grams of CO2-equivalent (CO2e) per megajoule, which is equivalent to 64.8gCO2e/kWh.
In this regard, Finland does qualify, having grid emissions intensity of 39gCO2e/kWh, according to Nowtricity data.
However hydrogen producers will still need to prove that the energy they use has come from renewable sources rather than nuclear, by securing power purchase agreements with renewable producers.
But the country may in future qualify for status as a 90% renewable grid: the IEA estimates that Finland will almost triple its wind capacity by 2030.
Plug yesterday (Tuesday) signed memoranda of understanding with the relevant regional authorities for land for the projects, and said it is in active discussions with lenders to finance the project.
The New York company plans to fund the project with 25% equity and 75% project financing.
