Estonian companies working on a green hydrogen value chain in 5 to 10 years

Estonia outperformed its 2020 renewable commitments and Estonian energy company Alexela expects the success story to continue: On the back of the PV growth, the country may achieve the GHG reduction goals this year that the EU has set for 2030.

This achievement won’t automatically translate into green hydrogen production, however.

“Estonia, like all other EU countries, is still far from reaching the level of intermittent power generation where we could see enough hours of low or negative electricity prices to facilitate hydrogen as an alternative for large-scale storage,” Marti Hääl, executive vice president of Alexela, told pv magazine. “For example, the Nord Pool day-ahead electricity price was below €10/MWh in 2020 only for 1,122 hours. It is not enough to make large-scale hydrogen electrolysis plant Capex feasible.”

“We believe that in 5 to 10 years this situation will change, and the volatility of power market prices will increase, including PV, where we already see three-digit growth rates per annum.”

According to Hääl, PV is growing primarily on “valuable agricultural landscapes. I believe that, in our region, PV should be more suited for prosumers, both residential and industrial, and offshore wind could be the core of large-scale renewable electricity.”

Together with PowerUp Energy Technologies, Alexela recently launched a first end-user hydrogen application. Green hydrogen production is the next step.

“Existing industrial production is all based on methane reforming. Some pilot electrolyzers are already up and running. But in terms of the future, we are currently working on a consortium of Estonian companies to start a green hydrogen value chain from production to consumer,” said Hääl.

PowerUp Energy Technologies, which produces hydrogen fuel cell-based electric generators and proton exchange membrane fuel cells, pays close attention to the maritime, electric car, and refining sectors.

“With sulfur content regulations becoming more stringent, usage of green hydrogen in the refining sector has increased tremendously,” Dr. Ivar Kruusenberg, founder and CEO at PowerUP Energy Technologies, told pv magazine. “In the same way, metal refineries are one of the main users of hydrogen. Most of the electrolyzers used to produce hydrogen are sold to metallurgy companies.”

The startup teamed up with Alexela for the launch of the first end-user application in the country. It is also collaborating with one of the region’s most advanced mobility companies, Nobe, and other multinational companies. The final aim is to create a cluster for greater accessibility of hydrogen in the Baltic region. French and German companies are interested in the market.

“Presently, we are collaborating with gas giants like Messer group and Linde, and we have plans to team up with Air Liquide in the near future,” Kruusenberg explained. “So essentially, we work with hydrogen providers and try to integrate the system by making hydrogen available for our customers.”