P2X SOLUTIONS: Building an Emission-Free Welfare Society

In Finland, in the town of Harjavalta, a green energy revolution is underway thanks to P2X Solutions. The company, established in 2020, is all about developing renewable energy projects that can shift the country’s reliance away from coal, oil, natural gas, and waste biofuel towards truly sustainable sources, namely hydrogen.

 The country holds a vision of net-zero by 2035, and recent decades have realised a significant shift away from fossil fuels. Nuclear is a strong part of the mix, and hydro generation is also favoured. The IEA highlights transport and heavy industry as key sectors where progress must be achieved if Finland is to meet its ambitious targets, and P2X Solutions can contribute with its exciting projects.

 An Arctic country, Finland is exposed to climate change more than others and already, plans have been put in place to strengthen the electricity distribution network and mitigate against strong winter storms.

 For Herkko Plit, CEO and Founding Partner, the work of P2X is essential and cannot be completed quickly enough. Formerly CEO of the national gas pipeline company Baltic Connector Oy, Plit has also served as the Deputy Director at the Ministry of Employment and the Economy and the European Commission.

 “From the very beginning, our aim has to be to work professionally while having fun and being able to react to market changes,” he tells Energy Focus.

 CONSTRUCTION UNDERWAY

 The project in Harjavalta will see a 20 MW electrolyser installed to create green hydrogen and synthetic fuels including synthetic methane. The €70 million construction project is already underway and funding from domestic and international partners is in place. In 2021, the Climate Fund agreed to a capital loan and in 2022, the Ministry of Employment and the Economy issued a significant grant. Prime Capital AG, an independent asset management firm, based in Germany, agreed a €5 million equity investment and a €20 million equity-like shareholder loan. Plit is excited about the work underway right now.

 “Construction activity has started and we have been working at Harjavalta site since July,” he says. “We are completing preparatory works, digging the ground and creating the basement. The initial phase is complete and that involved initial earthworks and removal of trees and land. It is a greenfield site, and in the coming months we will complete preparatory works so that we can begin to put up buildings. That phase will start around March next year and all of the equipment will arrive at site. This will continue right into 2024 when we will then look towards commissioning activities in the summer of ‘24.”

 Progress has been smooth with Plit highlighting only minor surprises in the process to date, but the experienced team have been able to stay on schedule and confident in the timeline.

 “The site and the civil works are being handled by a local contractor and that is commercially valuable as they are local to the project. Equipment deliveries and other elements are all sourced through international businesses. The electrolyser comes from Germany, the methanation unit comes from Finland – if we can procure locally we are happy, but the nature of the project is international and everything has to make sense commercially,” adds Plit.

 Agreements have been signed with Finnish organisation, Fimpec, around construction, project consulting, procurement services, and plant design; and Sweco has been appointed with a design engineering agreement.

 LONG-TERM BENEFIT

 Electrolysis of water using renewable energy will bring clean, green hydrogen and other synthetic fuels to the country’s energy mix. Heat and oxygen by-products can also feed into industrial processes, driving a circular approach and decarbonising the local economy.

 Ultimately, the goal is for the plant to reduce Finland’s CO₂ emissions by around 40,000 tons each year.

 “We are already discussing offtake agreements and 2024 seems like it is almost next door with these long-term arrangements. Mobility, especially heavy-duty mobility, is an emerging market and we are already discussing with truck manufacturers about how they will export to Finland and what are the requirements for local logistics companies. For example, there is no single hydrogen refuelling station in Finland and we will open to ensure that is broken in. There is so much engagement and our focus is on construction but also on sales, marketing, and everything else,” explains Plit.

 In September, a new 70 MW planned site in Joensuu was awarded European Commission IPCEI status (Important Projects of Common European Interest). Projects with this position are highlighted as those that provide the largest possible positive spill-over effects on the European hydrogen value chain, research, and society. It also brings opportunities for further subsidies and benefits and state level, and highlights P2X as a drier of the hydrogen economy.

 Plans are already in place for further projects and the longer-term vision of the business is to roll out 1000 MW of electrolysis capacity by 2031.

 “This is a huge opportunity for employment and the Finnish industrial sector in general. You have to consider the value chain, and there will be so many opportunities. I was Head of Unit in the Ministry of Employment and the Economy and the European Commission and this gives me an insight into how these projects contribute,” Plit details.

 STRONG SYNERGY

 In August, P2X announced a study partnership alongside Savon Voima to understand more about the possibility for industrial-scale green hydrogen and electro fuels to be generated at the Savon Voima power plant in Joensuu in the country’s east. The idea is to build a production facility on site in Joensuu with 30-50 MW capacity and the ability to heat up to 20% of the district with excess heat from the hydrogen unit.

 “It’s exciting to work together with a local energy company,” says Plit. “This is very important for the city’s emissions targets. There are other synergies, we are producing synthetic fuels and they have a bio-based power plant that sends emissions into the sky from burning wood chips. We capture that and we can make synthetic methane, methanol, and ammonia. The synergy between our companies is very strong and this is a marvellous example of circular economics.”

 Arto Sutinen, CEO at Savon Voima added: “This is a world-class example of a hydrogen project and circular economy. This is also a project that promotes local strengths and provides employment, and where each actor involved benefits the other. The project, when realized, will be an important piece of Savon Voima’s goal of carbon neutrality. It is a pleasure, together with P2X Solutions and the city of Joensuu, to be a pioneer in Finland in making future visions a reality.”

 The city’s mayor, Kari Karjalainen, was equally optimistic about the potential, saying: “The introduction of the hydrogen economy into the region contributes to the development of the electricity transmission capacity and business life of the whole of Eastern Finland and opens opportunities for further related investments.”

Back in the west, in Harjavalta, Plit doesn’t see huge numbers of direct jobs being created in the short-term, but he is confident that the growth of the industry, still in its early stages, will drive significant economic activity in the country.

 “I don’t see us having hundreds of people in the company,” he says. “There is a need for automation to steer the fleet of machines. In terms of the bigger picture and the wider hydrogen economy, there have been calculations from researchers that suggest that €1 million investment creates indirectly 10 jobs. Our investment portfolio is in the billions and in Finland as a whole, there is around €50 billion set for the hydrogen economy.

 “It will have a huge impact,” he states. “The initial projects are laying the base for the future market. We all know that it has to be scaled up and there was an article published recently in a large magazine here in Finland stating that Finland has 10% of hydrogen production potential in Europe because of cheap inputs including wind power, clean water, and lot of barley-based CO₂. This all offers a commercial benefit.”

 The country is busy planning for eventual hydrogen export status, and will benefit from strong connections with Sweden, the Baltic nations, and Germany and Poland. Discussions are underway between national TSOs in the traditional utilities sector and the Nordic Hydrogen Route project is already far long the road alongside Sweden. The situation in the European energy market, as a result of the Russian invasion of Ukraine is only driving innovation in the green energy sector faster.

“The appetite is there,” confirms Plit. “The tough discussions around price and market in ’24 and ’25 are ongoing. The gas market is a great example. If you look at the price level before the war started, it was so cheap. Today, it is so expensive, and we wonder what it will look like next winter. It is essential to have a longer-term perspective to understand how the system and market develops, and what pressures come from a different range of sources.

 “The world is constantly changing,” he says. “We have two wonderful projects in the pipeline but we have to be creative and agile about the next one. If we want to be the forerunner in this market, then we have to deliver solutions that are innovative all the time. If we rely on what we have and think everything is going fine, competitors will pass us very quickly.”

 OPPORTUNITY IN CRISIS

 P2X Solutions is young and agile, and mission-driven. Because of this, it has been able to navigate many of the significant challenges that have plagued bigger, cumbersome businesses.

 “We are still a young company but all of the systems we are developing are not what we would want to refer to as start up. All of the accounting systems and other systems are of IFRS standards and we are implementing this from the beginning. We are trying to instil professionalism from day one so that the company is ready to expand quickly,” explains Plit.

 “The start up mentality allows you to be agile – decision making is quick. This is something that we want to keep. Our senior management has worked in large corporations and we know of the benefits and drawbacks that they have. We always want to be agile in the future so that we can steer the project forward.”

 Even the Covid crisis, which gave Plit the time to develop the genesis of the business was a small hurdle.

 “There are always opportunities in a crisis,” he says. “Covid reorganised my calendar in a totally different position and that gave me time to develop the concept of P2X. With the start of the war, there has been a need for a green transition but it will take time.

 “It will take two years on site (or more when you start from scratch), and we have to overcome the energy crisis with solutions in the short term. If we are not busy with it now, then the crisis will last many more years. When we opened the gas markets here in Finland there was much of the same scepticism about how it would work, but we looked at how the market dynamics would develop and it was a success. Someone has to go and start things, and then others will follow.”

 This first mover advantage combined with the hunger for an energy transition as well as government targets looming make for an exciting time and a wide-open market. Plit says that the political, public, and industrial demand is there, and it is now about sustainable roll out. Here, he is happy to lead.

 “I like that others are coming into the market. If we were the only ones, I would be alarmed and worried that we have thought totally differently about things. The others are following us and so we think that means are a doing right. We have a year and a half or two years advantage and we welcome competition in the market as it is good for the hydrogen economy in the country and in the European community as well.

 “Investors are not investing in fossil fuels and NGOs are reacting strongly to those that do. The political momentum is so strong. The war in Ukraine was the last push to ensure no one will rely on Russian fossils. The last question is how to stop that reliance completely, and there are new questions that can only be achieved with a green transition in the European context.

 “We have to convey a positive message to end customers as this is not their daily business. It takes time, but the understanding is growing every day,” he says.

 Power-to-X solutions are attractive because of the ability to convert electricity to chemicals and fuels that can be more easily stored and transported. In Harjavalta and Joensuu, P2X Solutions is set to provide proof of concept, and deliver real world application, demonstrating what is possible, changing the world to become cleaner, together.

 “The reality is that without hydrogen, we do not reach our global climate targets. We need to have hydrogen ahead of other sources,” Plit concludes.