Renewable Energy Sources andDistributed Energy Production

Wind Power in Finland – Export Prospects and Emission Reductions
Tuulivoima Suomessa – vientipotentiaalia ja päästövähennyksiä

Hannele Holttinen, Esa Peltola, Sami Tuhkanen
VTT Processes, Espoo, Finland
VTT Prosessit, Espoo
Abstract
Wind power, as a renewable source of energy, reduces the greenhouse gas emissions. For Finland,
the technology also brings business opportunities,
as the Finnish industry already has a position in the
global, fast growing wind power market. The windenergy project within the Climtech Programme focused on the technology export potential of Finnish industry in wind power markets, and on the reduction of greenhouse gas emissions of wind
power in the Finnish and Nordic energy systems.
The global development of wind power technology
and market prospects of wind power were taken fora starting point when estimating the technology export prospects for the Finnish industry. If the Finnish industry is able to maintain the current market
shares, the exports will be 0.8–1.2 billion € in 2010.
If the Finnish wind turbine manufacturer were able
to get a global market share of 5%, this would morethan double the Finnish exports. The fast growing
wind power market is abroad. To stay there, or to
get there as a newcomer, requires more and morenational support in the form of R&D and a homemarket.
For the emission reductions, simulations for the
Finnish and Nordic energy systems were conducted to find out the amount of emission reductions wind power could make. CO2 emissions will
be reduced 700–650 gCO2/kWh wind produced.

The costs for CO2 abatement by increasing wind
power capacity in Finland seem to be about 20 €/t
CO2 for the first TWh of wind, and when the capacity is further increased the costs also raise gradually to 35 €/t CO2 for the seventh TWh of wind.
Lyhennelmä
Tuulivoima on uusiutuva energiantuotantomuoto,joka vähentää kasvihuonekaasupäästöjä. Suomelle tuulivoimateknologia tuo myös liiketoimintamahdollisuuksia, koska suomalaisella teollisuudella on jo vahva jalansija voimakkaasti kasvavillamaailmanmarkkinoilla. Climtech-ohjelman tuulivoimaprojektissa tarkasteltiin Suomen teknologiaviennin mahdollisuuksia tuulivoimamarkkinoilla sekä tuulivoiman päästövähennysmahdollisuuksia Suomen ja Pohjoismaiden energiajärjestelmässä.
Arvioitaessa tuulivoimateknologian vientipotentiaalia lähtökohdaksi otettiin markkina-arviot sekä
tuulivoimateknologian kehitystrendit maailmalla.
Mikäli suomalainen teollisuus pitää nykyiset markkinaosuutensa kasvavilla markkinoilla, teknologiavienti vuonna 2010 on 0,8–1,2 mrd €. Mikäli
suomalainen tuulivoimavalmistaja saa 5 % markkinaosuuden, teknologiaviennin arvo yli kaksinkertaistuisi tästä. Kasvavat ja voimakkaasti kehittyvät tuulivoimamarkkinat ovat ulkomailla, ja siellä pysyminen tai sinne pääseminen vaatii enenevässä määrin kansallista tukea: t&k-toimintaa sekä
kotimarkkinat.
Tuulivoiman päästövähennyksiä arvioitaessa simuloitiin Suomen ja Pohjoismaiden energiajärjes5

telmiä. CO2-päästöt vähenevät 700–650 gCO2/
kWh tuotettua tuulivoimaa kohti. CO2-päästösäästöjen kustannukset ovat simulointien mukaan noin
20 €/t CO2 ensimmäiselle TWh:lle tuulivoimaa, ja
kun tuulivoimaa lisätään suuria määriä, kustannukset kasvavat asteittain tasolle 35 €/t CO2 seitsemännelle TWh:lle tuulivoimaa.

1 Introduction
Wind power, as a renewable source of energy, reduces the greenhouse gas emissions. For Finland,
the technology also brings business opportunities,
as the Finnish industry already has a position in the
global, fast growing wind power market.
The wind energy project within the Climtech
Programme focused on the technology export potential of Finnish industry in wind power markets,and on the reduction of greenhouse gas emissionsof wind power in the Finnish and Nordic energy
systems.
With global development of wind power technology and market prospects of wind power as a starting point, the technology export prospects for the
Finnish industry were estimated. Also the national
activities, including R&D, required to achieve theexport potential were estimated.
For the emission reductions, simulations for the
Finnish and Nordic energy systems were conducted
to find out the amount of emission reductions
large-scale wind power could make in the system.

2 Wind power market opportunities
for Finnish industry
2.1 Wind power technology trends
The most important wind power trends in near future are increasing unit size, increasing project(wind farm) size and the start of large-scale offshore installations. For turbine technology, thetrends are increased use of control and smart structures, increase in gearless or partly direct drive
concepts, and shift towards variable rotating speed.
6Larger production units require new solutions forregulation of the production and the network.
The wind turbine unit size has increased 10-fold in
10 years. The nominal power of the wind turbines
is presently between 0.6 and 2.5 MW. The next step
will be from the 2 MW turbines to 3–5 MW units(Fig. 1). The turbines can be installed on land at
least up to 2–3 MW. On estimate, 5 MW turbines
will be commercialised around the year 2005, andturbines up to 10 MW have been considered technically feasible. The large turbines will be designed for offshore sites.
The basic concept – a two or three-bladed turbinewith a horizontal axis – seems to remain in the future. In the megawatt turbines the stall control seems
to give away for pitch or active stall control. As theunit size increases, load monitoring, control andsmart structures become more important. Offshore
wind farms will set new requirements for the design
and implementation for wind power plants. Especially the requirements for reliability and lifetime
will increase. In the future there will be special offshore and on-shore wind turbines, instead of turbineswith offshore modifications in the market today.
In spite of the development of gearless solutions,the market share of turbines with gears will staylarge, and also increase in the future. Large turbines will have their market predominantly offshore. Offshore markets have been estimated to remain at a level of about 10% of the global wind
power markets.
Looking at the global wind technology trends fromthe Finnish industry point of view, the components
for the turbines will contain more special knowhow. Especially offshore installations increase theneed for condition monitoring and preventive
maintenance. The concept solutions of the turbine
manufacturers have to be taken into account fromthe beginning during the development, design andoptimisation of the components. This will lead todifferent products for different manufacturers,
which will bring about increased development
costs and need for pilot plants. Increasing projectsize will also increase risks involved in new technical solutions, especially when taken into use for the
first time far from Finland.

Height above ground/sea level (m)

200

150

100

50

0

1999
POWER P 1
HUB HEIGHT H 60
ROTOR DIAMETER D 60

-50

2002
2
70
70

2003
3
90
90

~2005
5
100
120

2010?
10
120
160

MW
m
m

Figure 1. Expected increase in the unit size of wind power plants in the future.

2.2 Finnish industry has a strong
position
The Finnish industry manufactures 10 to 20 per
cent of the main power plant components. Windtechnology exports amounted to over 170 million €in 2001, which accounts for five per cent of the total wind power market. In 2001, the first 1 MW pilot plant of the Finnish wind turbine manufacturer,
WinWinD, was installed. International project development has been initialised in 2001.
ABB Finland Oy, a corporate responsible for small
generators within the international consolidated
corporation ABB, is the market leader of wind turbine generators with a market share of 20–30%.
The market share has been growing especially inthe megawatt class turbines. Also frequency converters are manufactured in Helsinki.
The Finnish Metso group has several wind powerbusiness areas. Metso Drives (former Santasalo
and Valmet) manufactures gears, with a 10–15%
market share. Metso Valimo has recently been increasingly manufacturing large castings, like na-celle and hubs. Metso Automation offers condition
monitoring and together with Metso Drives they
have developed a smart gear concept.
Ahlström Oy Fiberglass has been active in wind
power business since early 1980’s. It manufactures
glass-fibre products to suit the blade manufacturers’ needs. Exel Oy is producing pre-fabricated fibre-enforcements for the blade manufacturers.
During the last few years there has been increasing
export of materials for towers, like pre-manufactured steel plates and flanges for towers (Rautaruukki and subcontractors). The first ice prevention systems for wind turbine blades including special ice detectors of Labko Oy were exported in1998 by Kemijoki Arctic Technology. Vaisala Oyj
is a strong company with wind and other meteorological sensors already in use in wind speed measurement campaigns, but has opportunities for export of control anemometers for wind turbines.
Further subcontracting opportunities for the metal
and machinery industry include e.g. manufacturing of towers directly to turbine manufacturer, for7

25–40% in recent years. Strong growth is expected
to continue for several years.

the market area Finland and Baltic sea area, yaw
gears directly to turbine manufacturer and cogwheels as a subcontractor to gear manufacturers.

The estimations in this study are based on the wind
power market update of BTM Consult (BTM Consult 2001). This annual market analysis has been
published since the 90’s. The total cumulative capacity of wind power is estimated to be nearly
60 000 MW in 2005 (40 000 MW in Europe) and
140 000 MW in 2010 (80 000 MW in Europe). The
annual demand for wind power is estimated to be
10 000 MW a year in 2005 and 25 000 MW a year
in 2010. According to these forecasts, the highgrowth will continue until 2005, after which thegrowth in Europe will level out, but will continue
high in other parts of the world, Fig. 2.

Products in reinforced plastics also have opportunities to grow in Finland. Manufacture of blades on
licence for the arctic applications offers a special
opportunity in Finland. So far a manufacture of ice
prevention systems directly integrated to blade
manufacturing process does not exist. The importance of pre-manufactured girders and other prefabricated products for blades may grow with thegrowing size of blades.
2.3 Growing wind power markets
globally

2.4 Good export prospects for Finnish
wind technology

Wind power is growing fast globally, especially inEurope. At the end of the year 2001, the wind
power capacity of the world was 24 000 megawatts(MW), of which major part, more than 17 000 MW
in Europe. In 2001 the new installed capacity was
about 6 000 MW, corresponding to a market valueof roughly 6 billion €. The growth rate has been

The development of Finnish wind technology export in the future depends on the ability of the component industry to maintain, or even increase themarket shares of the fast growing wind power mar-Wind power market, annual installed capacity
30 000Installed capasity MW/a

25 000

20 000

15 000

10 000

5 000

0
1999

2000

2001

2002

Europe2003

2004

America

2005

Asia

2006

2007

2008

2009

Rest of the world

Figure 2. Annual installed wind power capacity, estimated development until year 2010.

8

2010

ket. The new Finnish turbine manufacturer’s ability to get a hold of the global market also impacts
the potential by strengthening the already existing
technology cluster. The networked co-operation
provides opportunities for more exports related toblade technology, tower structures, control systems and the setting up of offshore wind farms.
The export of Finnish wind power technology for
year 2010 has been estimated based on the global
wind power market forecasts and the developmentof Finnish market share in the markets. The basecase has been taken directly from the forecasts of
BTM Consult, a 25 000 MW/year global market in2010. A more conservative estimation of 15 000
MW/year has been included corresponding a 10%
average growth rate in 2002–2010. The cumulative
installed wind power capacities in 2010 according
to these market projections are 140 and 120 GW,
respectively.

Value of exports, million € per annum

The value of the market has been estimated taking
an average cost of total investment of wind power
as 1 million €/MW. Here the turbine accounts for
0.7 million €/MW. In reality the unit cost of investments depends on the site. It is higher for offshore
wind farms and arctic applications. Offshore mar-ket is expected to account for 10% of the total market in 2010. The value of the total market is estimated as roughly 25 and 15 billion € in 2010, forthe two market projections.
The export prospects are presented in Fig. 3, for
two global market projections and for three strategies. In a ”business-as-usual” strategy, no new
products or concepts are sought for and the goal isto keep the present market share in the present
products. Under these circumstances the exports inyear 2010 would be 1.2 billion €. The next strategy
is to actively develop current products, aiming at a
50% increase of market share. This would meanfor example smart gears and generators improving
the reliability and decreasing the maintenancecosts. Succeeding in these concepts, as well as
manufacture of blades in Finland, requires more
profound know-how of wind power technology
than today and close collaboration with turbine
manufacturers.
In the third projection, Finnish wind turbine manufacturer succeeds in reaching a considerable market share in the global markets. In this case the export prospects would be in the range of 2–4.5 billion € in 2010, depending on the market share. The

3 500
3 000
2 500

Market evaluations:
25 GW will be constructed in 2010
15 GW will be constructed in 2010

Component,
power plantand project
export2 000

Component
export – a wide
product range

1 500
1 000

Component
export – thepresent product
range

500
0
1992

1994

1996

1998

2000

2002

2004

2006

2008

2010

2012

Figure 3. The export prospects of wind power technology until the year 2010 based on two different
evaluations of the world market. There are three strategies to compare: the present product range,a substantial investment in technology development (a wide product range) and an investment also inthe domestic market (export of also wind turbines and projects).

9cumulative exports in 2002–2010 would exceed
8–14 billion € with the same assumptions made.
If the global market develops according to thelower projection, the export prospects are 0.8 billion € with current component market shares and
1.3–2.6 billion € with Finnish wind turbine manufacturer having a market share between 2–10%.
For comparison, the total technology exports of theFinnish energy sector was 4 billion € in 1998. For
Finnish wind power, it is obvious that technology
export prospects is a more important technology
driver than the renewable energy production fromwind power.
2.5 Needs for R&D to improve
technology exports
In the interviews of Finnish industry, it became
clear that maintaining the market share in the
global wind power market is challenging. The suppliers capable of increasing the production as fast
as the market have a strong position. Development
and tailored products are a prerequisite, and both ahome market and investment in R&D are important and needed. Large, already established actors
can maintain their exports also in the future without a home market, but as long as turbines andcomponents are under heavy development work,
demonstrating new solutions nearby enables also
the component manufacturers to have importantfirst references.
Goals for the national wind technology R&D canbe divided into 5 topics. Wind turbine concept
based on semi direct drive, low speed machine, toachieve an exceeded lifetime of at least 30 years,
has a target of significant market share globally atleast in drive train components. Blade technology
to fit cold and icing conditions, both in mountainous areas and by the sea, would enable increased
rotor diameter with modular solutions. Foundationand installation techniques for Baltic sea offshore
wind farms to apply for different sea bottom conditions and water depths, has to manage combined
wind, wave and ice loads on foundations andtower. Wind turbine control and network connection concept aims to improve the management and10control of large wind farms especially regarding topower production and network stability. Development of smart components aims to increase lifetime and decrease fault sensitivity and O&M costs.
Besides the technology R&D, there are several aspects of R&D relevant for wind power production
and operation in Finland. Even though the standard, Central European technology can be directly
applied in Finland, there are some special features
calling for national R&D. Better knowledge of thewind resource: long term measurements offshore
and at altitudes relevant for wind power, 50–150 m
above ground or sea level, including ice conditions. Wind atlas needs updating and adjusting to
the forested coastal and arctic fell terrains. Windpower integration to the electricity system: needfor more flexibility to accommodate the varying
wind power production will become topical whenmore than 5% of Finnish electricity is producedwith wind. Short term prediction of wind power
production will be needed by the system operator,
and also producers, to help scheduling and market
trade. Follow up of production, failures and costs ofwind power in Finland (statistics): operational experience of wind power in Finnish climate and terrain is of value to producers, while the turbine
types and concepts are new. Estimates for the production reliability and O&M costs are needed
when making decisions for investments.
A road map for research, technology development,
demonstration and commercialisation of windtechnology was sketched in order to exploit the export prospects described before and to fulfil thewind energy production targets set in the national
climate programme. The following items weretaken as the goal state• Finnish wind turbine manufacture gains a global
market share of 10% in 2010, with all main components manufactured by Finnish subcontractors or suppliers.
• The component suppliers in the market today
maintain their global market shares in the growing markets.
• The Finnish cold climate blade technology
dominates the market segment.
• Finnish consortium achieves 10% market shareof offshore wind farm projects in Northern Europe.

• The installed wind power capacity in Finland
500 MW in 2010, whereof 50% on the coast,
30% at sea and 20% on arctic fells.
• The Finnish wind power technology exports at
an annual level of at least 2 billion € in 2010.
The summary of the road map in Fig. 6 gives the
cumulative sum of investments from 2002 until
2010. The employment has been estimated fromthe export figures using an average value of 1
man-year per 100 000 € value of exports.
There are presently two research programmes in
preparation and due to be launched in 2002 at National Technology Agency Tekes that include topics
related to wind power technology: MASINA, technology programme for machines and, DENSY,
programme for distributed energy. By means of aseparate wind power research co-ordination, theR&D needs of wind power technology could be
fulfilled using these R&D programmes. However,the studies and research relating to wind power
production and operation would still be excluded
from a research programme support.

3 CO2 abatement of wind power for
Finland
The electricity supplied by wind power is free from
CO2. When wind energy is replacing production
forms that emit CO2, the CO2 emissions from theelectricity system are lowered. The amount of CO2that will be abated depends on what production
type and fuel is replaced at each hour that wind
power is produced. This will be the production
form in use at each hour that has the highest marginal costs. Usually this is the older coal fired
plants, resulting in CO2 abatement of wind energyof about 800–900 gCO2/kWh, often cited as theCO2 abatement of wind energy (EWEA 1996).
This is true also for larger amounts of wind, forcountries that have their electricity production
mostly from coal.
For other countries, the situation may change when
adding large amounts of wind power to the system.
There might not exist old coal plant capacity for thewhole wind power production to be replaced at all
times of the year. Some hours of the year wind
would be replacing other production forms, likeWind power in 2010 – public support and results
Reduction in CO2-emissions
0,8 Mio t/a, 8 % of the national
climated programme target

39 MW, 75 GWh/a
in 2001,of which
19 arctic turbines

Promoting the home market in 2002–10
Total ~ 150 Mio. €investment subsidies 100 Mio. €production subsidies 30 Mio. €offshore demonstration 15-20 Mio. €Finnishwind power plant
1 MW pilot
2001

Exports to
growing markets
170 Mio €in 2001

Production in 2010
500 MW, 1100 GWh/a~100 in operation and maintenance
Employment~ 20 000 inexport industry

Product development in 2002–10
total ~ 10 Mio €arctic blade 1 Mio €Finnish wind turbine 5 Mio €Smart components 4 Mio €Technology exports
in 2010 1200 – 4500 Mio. €/A

Basic know how, follow up ~10 Mio €
2000

2010

Figure 4. Wind power in Finland: opportunities and benefits achievable to year 2010.

11

gas fired plants production (CO2 emissions of gas
are 400–600 gCO2/kWh), or even CO2 free production forms, like hydro, biomass or nuclear power.
To find out what will happen, the system has to be
simulated. In the Nordic countries, the electricity
system is characterised by a large share of hydropower. The deregulated electricity market in the
countries has led to the joint electricity market
Nordpool. It is therefore relevant to look at thewhole Nordic system for CO2 emissions with andwithout wind power.
The effect of wind power production on CO2 abatement is simulated in two ways. By running simulations on the EFI’s Multi-Area Power Market Simulator (EMPS) model for the whole of the Nordic
electricity market we get the effects of wind power
for an average, wet and dry year for the whole system. These simulations are based on electricity
market operation with a fixed power production
capacity, which takes into account the operating
costs of each power production form only. By running EFOM for the Finnish energy system we getthe effects of wind power to one country, also taking into account the investment to new capacity
during a longer time period.
The simulations are made assuming that all thelarge-scale wind production will be available in thesystem. This means that local grid connection issues as well as the hourly variations of wind would
be taken care of.
3.1 Simulations with EMPS model for
the Nordic area
The power market model EMPS is a commercial
model developed at SINTEF Energy Research in
Norway for hydro scheduling and market priceforecasting (Flatabö et al. 1998, Sintef 2001).
EMPS simulates the whole of the Nordic market
area, divided into areas with transmission capacities between the areas. The simulation is here madefor one year, with weekly time steps. The model
simulates a system where the firm consumption
pattern and production system are static.
Two systems have been selected for the base case:electricity system for year 2000 and a suggested
12

system for 2010 (MTI 2000, MTI 2001, Energy 21
1996). Wind is added to these base case systems
step by step, cases wind1–wind3, to study the incremental effects of wind power on the system. We
start with 16 TWh/a (wind1) and reach 46 TWh/a(wind3) annual total production in the Nordic countries. This corresponds to 4–12% of total electricity
consumption and it is divided between the countries
as 20–45% of consumption in Denmark and 2–10%
of consumption in Sweden, Norway and Finland.
Wind1 corresponds to existing targets for 2010 andwind3 is near possible targets for 2030.
To determine the market price and capacity neededfor each week, we need the demand and a price foreach production capacity. Operating costs given as
input values are used for thermal production, taking into account the technical availability when
composing the production/price curve for eachtime step. Water values are the prices used for hydro plants with reservoirs. These water values, thevalue of stored water at each time of the year, arecalculated in the model by stochastic dynamic programming. If transmission capacity is restricted,
there will be different prices in different areas, sobasically the model simulates how the Nordpool
market operates. Wind comes to the market as a
price taker, with 0 bidding price, like the run-ofriver hydro plants. The model takes into accountthe different inflow and varying wind situations byusing historical inflow and wind data from 30 years
as input for the simulation.
The simulation results for Finland show that windproduction replaces condense production (mainlycoal). Import to Finland increases. For wet years in
the wind3 case (7 TWh in Finland and 46 TWh in
Scandinavia) the nuclear production is slightly reduced (0.2 TWh). In Sweden, the electricity consumption in electric boilers is increased with increased wind production. This means that windproduction is replacing oil (alternative fuel for theboilers). Wind production is replacing condense
production, for the little there is to replace, andsome of the nuclear and CHP production. Export ofelectricity is increased substantially. In Norway
the consumption in electric boilers increases withadded wind production. Export is also increased.
In Denmark wind is replacing condense (mainlycoal) and increasing exports. Both imports and ex-ports in Denmark are increasing with increasing
wind in the system. As wind production is added as
extra production to the electricity system, about
40% of the wind production is transferred out of
the Nordic countries with the transmission lines toGermany, Poland and the Netherlands (in the scenario for today’s system about 30%).
Using emission coefficients for produced electricity from different production forms we can estimate the yearly CO2 emissions of the simulatedcases (fig.4). Coal, oil and gas fired units emit approximately 800, 650 and 430 gCO2/kWh respectively. For combined heat and power production,
the emissions for electricity are estimated to beabout half of condense production, to account partof the emissions for the heat production. Biomass,
nuclear, hydro and wind production are taken as
CO2 free production forms. The effect of electricity replacing oil used in boilers (price flexible consumption) is to lower the emissions, this is also
taken into account in the emissions shown in Fig.5.
As a combined result of wind power replacing different fuel in the Nordic system, a CO2 reduction of
700 gCO2/kWh, adding the amount of wind foreseen in 2010 (wind1 simulation) is achieved.
Adding more wind results in somewhat lowered
emission reductions: 650 gCO2/kWh in wind3

case. For the 2000 scenario the CO2 reduction isslightly smaller, 680–620 gCO2/kWh.
It is notable that the wind production added to Norway and Sweden will mostly replace thermal
power produced in Finland, Denmark and Central
Europe. This is a result of having an interconnected
system with a common electricity market: power
will be replaced where it is most cost effective. The
hydro power in Norway and Sweden will not be replaced even with substantial wind production, as
long as there are possibilities to increase the exports to other countries.
3.2 Simulations of the EFOM model for
Finland
The EFOM model is a quasi-dynamic many-period
linear optimisation model. It has been widely used
to analyse national energy systems and mitigationof greenhouse gas emissions (e.g. Lueth 1997,
Lehtilä and Pirilä 1996). In EFOM the network of
the described energy system starts from the primary energy supply and ends in the consumption
sectors. EFOM is a bottom-up model and it isdriven by an exogenous demand in the consumption sectors. In addition EFOM includes descriptions of other activities that emit greenhouse gases(e.g. waste management and agriculture). The sys-

Simulated CO2 emissions from electricity production(average hydro year)
50

MTonn CO2

40
30

20.9

20

3.1

10

16.6

15.2

ref2010-5.0
wind1 2010

2.6

14.7
1.8

0
-10

19.4

11.1

Central Europe
difference
FinlandSwedenDenmark
Norway-14.9
wind3 2010-20

Figure 5. CO2 emissions in reference, wind1 and wind 3 simulations for an average hydro year.

13tem is optimised by linear programming, using thetotal present value costs of the entire system over
the whole study period as the objective function to
be minimised. The study period is until year 2025,
and it is divided into sub-periods (time steps) of
1–5 year each.
Two different scenarios were studied: ”Baseline”
and ”Kyoto” up to the year 2025. In the Baseline
scenario no emission reduction targets were set on
greenhouse gas (GHG) emissions (i.e. Businessas-Usual scenario), and the development of the energy system is dependent mainly on the costs. This
leads to large use of coal-condensing power due toits good competitiveness. One reason for this is theprice of natural gas, which is assumed to increasenearly 100% from the present level during thestudy period. In the Kyoto scenario GHG emissions are stabilised to the 1990 level according to
the Finland’s national Kyoto target. In this case it
has been assumed that the use of coal-condensing
power is nearly prohibited among other measures.
Nuclear power production starts to decrease gradually around 2020 in both scenarios, and new capacity is not allowed. Hydro power capacity increases
slightly during the study period, mainly due to renovations and new small-scale capacity. Maximum
electricity imports are set to about 6 TWh/a in bothscenarios. The background of the scenarios is described in more detail in (Kara et al. 2001).
Both scenarios were calculated at first by letting
the model find the optimal level of wind power andother energy production technologies. Thereafter
fixed scenarios for wind power production havebeen used to study the effects of increased wind
power production on the energy system and CO2
emissions, using the same levels as in the EMPS
simulations, i.e. 1, 4 and 7 TWh/a in 2010 for Finland. The development of wind power production
costs was given as input. Onshore production is limited to about 2 TWh/a in 2010 and about 3 TWh/a in2025, due to e.g. land use restrictions. Offshore
production is more expensive despite the fact thatwind conditions are much better. It is assumed tobe commercial in Finland after 2005. In the simulations with fixed wind power scenarios, the EFOM

14

model finds a new optimum for the whole energy
system.
In the Baseline scenario, wind power production
remains quite low throughout the period as can beseen in Fig 6. In the fixed wind power scenarios(Base-Wind1 etc.), the incremental wind power replaces mainly coal-condensing power. Also small
reductions in district heat and power production
can be observed, especially in the use of natural gas
combined cycle capacity (only some hundreds
GWh/a). The GHG emissions will be reduced on
the average about 680–700 g CO2/kWh.
CO2 abatement costs for wind power have been estimated by comparing the annual costs of the wholeenergy systems in different cases. For Base-Wind1
scenario the average emission reduction costs during 2010–2025 seem to be about 20 €/t CO2. When
the wind power capacity is further increased the average costs will raise gradually to about 35 EUR/t
CO2.
In the Kyoto scenario, wind power capacity increases quite remarkably in the cost-optimal casedue to its competitiveness as an emission reduction
measure. The use of coal-condensing power isminimised and consequently, when more wind
power is added to the energy system, the new capacity replaces mainly natural gas combined-cycle(NGCC) capacity. The specific CO2 emission reduction is only about 260–300 g CO2/kWh due tothe high efficiency of NGCC and other smallchanges in the energy system. It should be noticed
that in the Kyoto scenarios the average CO2 emission from electricity production is much lower
than in the Baseline scenarios, and consequently
the achievable emission reduction are clearlylower. As absolute emission reductions are significantly lower, also the specific emission reduction
costs increase to about 40–60 €/t CO2. This way of
studying the abatement of wind power neglects theinitial CO2 abatement of the gas plant to the system, as well as the cost effective wind power already implemented in the base simulation. This actually reflects the situation in the future, when
there is no more coal to be replaced, but the replacement will be gas.

TWhBaseline
Base-Wind 1
Base-Wind 2
Base-Wind 4
Base-Wind 7

120
110
100
90

CHP, industry

80

CHP, district heat70

Condensing
power, other60

Condensing
power, coal

50

Wind

40

ImportNuclear

30

Hydro
20
10
0

2000

2010

2015

2020

2025

Figure 6. Total electricity supply in the Baseline scenario with different wind power production levels.

4 Conclusions
Finnish industry has a strong position in the wind
power markets: generators, gear-boxes, blade materials, steel plates for towers and large castings are
made in Finland, with a 10–20% global market
share. In 2001, the Finnish exports of wind technology amounted to 0.2 billion €. A new Finnish
wind turbine manufacturer, WinWinD, erected
their first 1 MW prototype in 2001. The Finnish
wind power technology industry already forms atechnology cluster. By networking, the companies
could have more export possibilities, for example
the blade technology, control systems, tower components and offshore foundation techniques.
Increasing the size, control and intelligence in all
the components of a wind turbine are the most significant technology trends in the near future. The
building of large offshore wind farms will start.
From the viewpoint of Finnish wind power compo-

nent industry, more and more special know-how
will be required. The solutions based on the concept chosen by the wind turbine manufacturer haveto be taken into account from the beginning, whendeveloping, designing and optimising the components.
Wind power is growing fast. The total installed capacity at the end of 2001 was about 24 GW, of which
17 GW in Europe. At the moment, the global market
for wind power is about 6 billion € (6 GW annually).
The growth rate is expected to stay high. When estimating the future potential of Finnish wind technology exports, the market estimates of 25 and 15 GW
annually in 2010 have been used. If the Finnish industry is able to maintain the current market
shares, the exports will be 0.8–1.2 billion € in2010. If the Finnish wind turbine manufacturer
were able to get a global market share of 5%, thiswould more that double the Finnish exports.

15

The fast growing wind power market is abroad. To
stay there, or get there as a newcomer, requires
more and more national support in the form of
R&D and a home market.
The effect of wind power to the CO2 abatement wasstudied by simulating the Nordic and Finnish energy systems with and without large scale wind
power production. Results from the simulations
show that wind power replaces mostly coal condense and oil as fuel for electric boilers. Reductions do not occur in the same countries as the windproduction, e.g. coal condense is replaced also inCentral Europe. As a result of adding wind to thesimulated system, CO2 emissions will be reduced
700–650 gCO2/kWh. The same result applies for
simulations for Finland. In a scenario, in which it
has been assumed that coal condensing power isprohibited in order to meet the Finnish Kyoto target, new wind power capacity replaces the need for
new natural gas combined-cycle capacity leading
to CO2 abatement of about 300 gCO2/kWh. Thiscase reflects the situation in the future, when there
possibly is no more coal to be replaced.
The costs for CO2 abatement by increasing wind
power capacity in Finland seem to be about 20 €/t
CO2 for the first TWh of wind, and when the capacity is further increased the costs also raise gradually to 35 €/t CO2 for the 7th TWh of wind. In the
Kyoto scenario the achievable CO2 abatement isclearly lower and therefore the costs are higher:
40–60 €/t CO2.
Acknowledgements
Wind data used as input in these simulations wasprovided in the courtesy of Risø, KTH, SINTEF
and VTT. The study was partly financed by Nordic
energy research programme.

Publications and reports madeunder the project
Peltola, E., Holttinen, H. 2001. Tuulivoimamarkkinat
suomalaisen teknologiaviennin kannalta. [Thewind power market from the point of view of Finnish
technology export (In Finnish)]. VTT Energy, Espoo. Report No. 45/2001 by VTT Energy. 40 p. +app. 1 p. Available at: [www.vtt.fi/ene/Climtech/
English/frame.html]
Holttinen H., Tuhkanen, S. 2002. The effect of wind power
on CO2 abatement in the Nordic electricity market.
Submitted for publication in Energy Policy. 12 p.

References
BTM Consult 2001. International Wind Energy Development. World Market Update 2000, forecast 2001–
2005. BTMConsult ApS, March 2000.
http://www.btm.dk
Energy 21 1996. The Danish energy action plan. Ministry of Energy and Environment, Denmark.
EWEA 1996. European Wind Energy Association.
Wind Energy – The Facts. European Commission.
http://www.ewea.org/src/information.htm
Flatabø N. et al. 1998. EFI’s models for hydro scheduling. SINTEF technical report no 3483.
Kara, M., Hirvonen, R., Mattila, L., Viinikainen, S.,
Tuhkanen, S. (eds.). 2001. Energy visions 2030 for
Finland. Edita Plc. Helsinki, 2001. 237 p.
Lehtilä, A., Pirilä, P. 1996. Reducing energy related
emissions – Using an energy systems optimization
model to support policy planning in Finland. Energy Policy, Vol. 24, No. 9, 805-819.
Lueth, O., Jattke, A., Schoettle, H., Wietschel, M.,
Rentz, O. 1997. Emission reduction strategies forCentral and Eastern Europe. Energy Policy, Vol. 25,
No. 3, 305-312.
MTI 2000. Scenarios for Nordic electricity markets.
Ministry of trade and industry, Finland (2000).
http://www.vn.fi/ktm/3/sahma/Pohjoismaiden_sah
komarkkinaskenaariot.htm. Referred: 10.1.2001.
MTI 2001. BAU scenario of climate change. Ministry of
trade and industry (2001), Finland.
Sintef 2001. www-sites of Sintef (The Foundation for Scientific and Industrial Research at the Norwegian Institute of Technology). http://www.energy.Sintef.no/
produkt/Hydro-thermal/uk_index.asp. Referred:
26.9.2001.

16

Road-Map for Solar Energy Technology and Markets in Finland

Heidrun Faninger-Lund
SOLPROS
Abstract
The National Climate Strategy of Finland fromspring 2001 and the Programme Promoting Renewable Energy Sources as part of it from 1999 define the national targets for renewable energy utilization and development in Finland up to year 2010.
Solar energy is part of the above-mentioned national programmes.
The national target for solar energy utilization by
year 2010 is 100 GWh/y. Moreover, taken the strong
market growth of solar energy internationally, newbusiness should also be generated. The domestic
market is considered important in helping to commercialize new technologies and products.
The objective of the development project “Roadmap for solar energy technology and markets in
Finland" (abbr. Solar Road Map) was to prepare anaction plan to the national solar energy targets andto show the way to reach the challenging goals
mentioned earlier. The project was part of the
Climtech programme of the National Technology
Agency (Tekes).
The action plan for solar energy developed in thisproject captures on the market possibilities both ona national and international level. The action planis based on a road-map in which different activities
are undertaken stepwise to achieve the milestones
set and the end goal. Different market driven activities and technology development have been combined to yield market breakthrough for solar energy. By year 2010 solar energy should be competitive on the national market, and the national industries should have reached a strong position on international markets. The goal of business generated by the action plan is 150 million euros/y by
2010.

The reduction potential of greenhouse gas emissions by solar energy is still small in Finland within
the coming ten years, but on a longer term the possibilities will increase and also the costs associatedshow a positive trend.
Tiivistelmä
Kansallisessa ilmastostrategiassa keväältä 2001 ja
uusiutuvien energialähteiden edistämisohjelmassa
vuodelta 1999 on esitetty kansalliset tavoitteet uusiutuvien energialähteiden käytölle Suomessa vuoteen 2010. Aurinkoenergia on osa näitä ohjelmia.
Aurinkoenergian hyödyntämisen tavoitetaso vuonna 2010 on 100 GWh/v. Ottaen huomioon aurinkoenergian voimakkaasti kasvavat maailmanmarkkinat tulisi kansallisten toimien myös luoda uutta
vientitoimintaa alueella. Kotimaan markkinat ovat
tärkeät uuden teknologian kaupallistamisessa.
”Road-map for solar energy technology and markets in Finland” (lyh. Solar Road Map) yritysprojektin tavoitteena oli laatia toimenpideohjelma kansallisten aurinkoenergiatavoitteiden saavuttamiseksi. Hanke oli osa Tekesin Climtech-ohjelmaa.
Tässä projektissa laadittu aurinkoenergian toimenpideohjelma tarttuu niin kansallisten kuin kansainvälisten markkinoiden antamiin mahdollisuuksiin.
Toimenpideohjelma on rakennettu ns. road map-muotoon, jossa ensin asetetaan välitavoitteet lopputavoitteesta käsin ja luodaan sen jälkeen toimintapolku toimenpiteineen alusta loppuun väli- ja
lopputavoitteiden saavuttamiseksi.
Toimenpideohjelmassa on yhdistetty erilaisia markkina- ja teknologiapohjaisia toimia. Vuoteen 2010
aurinkoenergian tulisi olla kilpailukykyinen kansallisilla markkinoilla ja suomalaisen teollisuuden
kilpailukykyistä kansainvälisillä markkinoilla.
Alan liiketoiminnan määrässä tähdätään vuonna
2010 tasolle 150 milj. euro/v.
17

Tämän vuosikymmenen aikana aurinkoenergian
merkitys Suomen kasvihuonepäästöjen vähentämisessä on pieni. Pitemmällä aikavälillä mahdollisuudet kasvavat ja lisäksi päästöjen vähentämiskustannukset aurinkoenergian avulla tulevat pienenemään.

1 Introduction
The National Climate Strategy of Finland fromspring 2001 and the Programme Promoting Renewable Energy Sources (MTI 1999) as part of it
from 1999 define the national targets for renewableenergy utilization and development up to year
2010 and set indicative goals for the year 2025. Solar energy, both solar heating and photovoltaics, ispart of the above-mentioned national programmes.
The national target for solar energy utilization by
year 2010 is 100 GWh/y. Moreover, taken thestrong market growth of solar energy internationally and the knowledge base of Finnish industries,
the national programmes should generate new
business worth 150 million euros by 2010 mainlyfor export markets. The domestic market is considered important in helping to commercialize newtechnologies and products.
The objective of the development project “Roadmap for solar energy technology and markets in
Finland" (abbr. Solar Road Map) was to prepare anaction plan to the national solar energy targets andshow the way to reach the challenging goals mentioned earlier. The project was part of the Climtech-programme of the National Technology
Agency (Tekes). The aim of Climtech has been to
analyze the possibilities and development needs oftechnologies for climate change mitigation and tosupport the commercialization of associated Finnish technology.
The Solar Road Map project (2000–2001) was
co-financed by Tekes and Solpros AY. Solpros did
the realization. The project focused on analyzing
the possibilities and development needs of solar
energy in the light of the greenhouse gas emission
reduction policies. The main technology areas ofinterest matching both national and international
markets and their needs have been analyzed. Fur18

thermore, areas important to strengthen Finnish industries have been identified. The project covered
both solar heating and solar photovoltaics.
The Solar Road Map results comprise three majorreports: a state-of-the-art review of solar energy
technologies and markets, a review and analysis ofsolar energy and its possibilities in Finland and finally the action plan for solar energy (road map). In
addition, the project resulted in establishing a national solar energy network and the Finnish Solar
Industries working group (FSI).

2 International trends
2.1 Markets
Solar energy plays a negligible role in the present
global energy system. Commercial solar energy
utilization represents about 0.05% of world’s energy. On a local level, solar may have much more
importance e.g. in providing heat to the buildings.
In the coming 10–20 years, the use of solar energy
will increase considerably, but it is not until the
middle of this century that is could be recognized
as an important energy source. Shell International
has estimated in its energy scenarios that around2060 solar energy could provide 30% of world’s
energy. Going beyond that towards the end of the
century, solar-hydrogen type of fuels could be an
option for a global energy economy.
Solar energy is cost-effective in several niche applications and close to competitiveness in many
applications in the built environment. Compared tobulk energy production by traditional energy
sources, solar energy will necessitate public support. From an environmental point of view, solar
energy represents one of the best alternatives.
2.1.1 Photovoltaics

The total worldwide installed capacity of photovoltaics (PV) is over 1 500 MWp and the production
capacity is now about 350 MWp/y. The growth ofthe market has been more than 30%/y over the last
five years. The global PV business has a value ofaround 2 500–3 000 million euros/y, of which about
half is from the PV modules. Some 70% of the2.1.2 Solar heating

markets are in the industrialized countries and 30%
in less-developed countries. The main market segments are off-grid stand-alone PV applications andgrid-connected PV. The latter segment has grown
fast and e.g. building integrated PV is becoming
very important for the PV industries. In Europe,
the German market is the largest one. In 2001,
about 75 MWp was installed and the German market grew by 45%. The Finnish PV market is about
0.1% of the global PV market.

The solar collector area installed worldwide corresponds to about 20 TWh/y. In Europe, some 10
million m2 of collectors are in operation representing 3–4 TWh/y. Swimming pools and domestic hotwater represent about 90% of all solar heating.
The European solar heating market grows in average 15% per annum. The major market area is central Europe and in particular Germany. The German market has grown more than 30%/y over thelast years, and the annual sales are around 1 million
m2 of collectors. The solar heating business in Germany corresponds to about 700 million euros/y.
Germany and Austria alone represent over 60% of
the EU market, South Europe some 25%, but
northern Europe less than 10%. For comparison,
the Finnish solar heating markets are less than
0.1% of the present EU market.

EU’s goal is to increase the use of PV by 500 MWp
in EU countries and by 500 MWp in developing
countries. This would mean that 2% of all newbuildings in EU would have a PV system. Taking aslightly lower growth estimate of 15%/y for PV
would mean a business potential of 8 000–12 000
million euros/y and a production capacity of
600–900 MWp/y in 2010. Most of the growth is anticipated to come from PV in buildings. This PV
segment is not yet competitive with grid electricity
and would hence need public support. Several industrialized countries have major programmes tosupport PV integration into buildings. The market
value of identified programmes is closer to 3 000
MWp.

100

55

2010

9.8
4.5

3

2

1999

10.4

10

Installed collector area, million m

The medium-term market trends for solar heatingin Europe are positive. The EU goal for solar heating in year 2010 is 100 million m2 of installed capacity, which would require a 35% annual market
growth. Based on present trends, 50–80 million m2
seems to be more likely. Ordinary business growth

2

3

2.5
1.36

1
0.25

0.35
0.25

0.2
0.1

0.1

0.01

0.007
0.002

0.001
Germany

Austria

GreeceHolland

Spain

Italy

Belgium

FinlandFigure 1. Solar heating market in selected EU countries in 1999 and 2010.

19

is around 15%/y which would mean a sales volumeof 5 million m2/y in 2010, or, a business value of
2 000–3 000 million euros/y. Figure 1 illustrates
the market trends in Europe.
2.2 Possibilities of technology
developments
Solar energy is a strategic innovation, which starts
with a small market share (e.g. niche). If the visionmaterializes then this niche will grow on a longterm into prevailing business. Solar energy is thus in
the beginning of its life cycle, in which developing
and commercializing the technology plays a major
role. Dropping the price of solar energy (or increasing its value), finding more economic applications
and improving the competitiveness, are the major
challenges for solar energy ahead.

In addition to direct process or technology innovations, one may recognize the possibilities of indirect technology development as well: balance ofsystem technologies; impact of other technology
trends; technology synergies (e.g. building, information technology), or utilization of existing infrastructures (e.g. building, information networks).

Availability of present PV
materials (c/m-Si)

l production of cheap solar grade Sil thin-film silicon cells
l thin film solar cells (a-Si, CdTe, CIS)
l advanced concepts (e.g. dye sensitized cells)

Effective and long-term
energy storage

l hydrogen and fuel cell based energy storage
l solar fuels, chemical heat storage
l solar hybrid and auxiliary energy systems
l large-scale thermal storage (CSHPSS)l load management
l inexpensive water storage

PV in built environmentand building integrationl module integrated inverterl PV/T systems
l large area PV modules and PV laminates
l multifunctional PV modules

Mass production of solar
collectors

l automated production technology
l new collector typologies (e.g. vacuum tubes)
l building integrated products (e.g. solar roofs)
l new materials (e.g. polymers)

System improvements
and increase of yield ofsolar heating systems

l low-flow strategies
l plug-in and life-line pipe connections
l low temperature heat distribution
l integration of solar technologies with buildings
l low and plus energy solar houses
l solar combi systems
l advanced materials (e.g. booster reflectors)

Figure 2. Key technology areas for solar energy.

20

For Finland, solar energy is on a short/medium
term a technology driven export possibility. Even asmall domestic market may support the development of industries and create competitive advantage through learning by doing and learning by using. In the following, we have summarized key
technology development areas.

The total amount of solar collectors in houses inFinland for domestic hot water and heating is about
10 000 m2, which corresponds to about 3 GWh/y. In
addition, there are some 70 000 m2 (10 GWh/y) of
simple unglazed air collectors used for crop drying.

3 Solar energy in Finland
3.1 Solar conditions and utilizationin Finland
The solar insolation in southern Finland corresponds on an annual level roughly to that of central
Europe (see Figure 3), or, 1000 kWh/m2/y on a horizontal surface. On an inclined surface, up to
1 100–1 200 kWh/m2/y may be expected. The seasonal variation of solar radiation in Finland ismuch larger – 90% of solar radiation is obtained
between March and September.

Relative solar radiation (1=Helsinki)

1.6
1.4
1.2
1
0.8
0.6
0.4
Southern
EuropeNorthern
EuropeCentralEurope

3.2 Project examples
One of the major recent solar energy projects is in
Ekoviikki, Helsinki (Faninger-Lund 2000). The
Ekoviikki area is an ecological suburb, a uniquedemonstration project for ecological and sustainable housing. The site includes the major solar projects in Finland. The largest solar heating systems
with 8 subsystems of a total area of 1 246 m2 solar
collector area were built in 1999–2001. In 2002, a
24 kWp building integrated PV system will bemounted on one apartment house. The PV panels
will form a part of the balcony structures. Alongwith other PV systems the total expected PV capacity in the area would be 35 kWp. Building integration of the solar panels has been important inEkoviikki.

1.8

0.2

The installed photovoltaics are 2.8 MWp (2 Gwh/y).
95% of this are off-grid PV systems in summer
houses, 5% are on-grid building integrated systems.

0
35

45

55

65

latitude, deg NoFigure 3. Yearly solar insolation on a 30 inclined south-faced surface (1=Helsinki).

Another unique Finnish project on long-term is solar energy storage, in which hydrogen technologies have been used with PV to provide 100% electricity over the year.

Figure 4. Left: One of the solar heating systems (solar roof) in Ekoviikki. Right: PV balcony in Ekoviikki.

210.05 euros/kWh. The economic conditions and requirements (life-time, interest rate) have an influence on the solar cost as shown in Figure 6. If viewing solar as part of the building or as a building
component, then a lower interest rate may be justified and the cost of solar would be 0.07–0.08 euros/kWh.
A special category is large-scale solar heating applicable for larger heat loads (>300 MWh/y). Here 0.05
euros/kWh or even less is possible already today.
Figure 5. Solar hydrogen systems developed in
Finland for stand-alone remote applications.

3.3 Cost of solar energy
The rate and magnitude of market penetration of solar energy is very much dependent on its costs. Excluding niche markets and some narrow market segments, solar energy in Finland is not yet fully competitive against traditional energy sources and fuels.
The cost of solar heat at present is around 0.1 euros/kWh. By year 2010, the price could drop to

Table 1 shows how different factors may influence
the price of solar heating.
In case of photovoltaics, the present system cost isaround 6.5–8 euros/Wp and year 2010 goal is under
4 euros/Wp. The theoretical lifetime of a PV module may be 40–50 years, as it does not have any
moving nor mechanical parts. Cost of on-grid PV
electricity is around 0.6–0.8 euros/kWh, forstand-alone off-grid systems with battery the cost
is 0.8–1 euros/kWh. If PV is a part of the building
structure (e.g. solar roof) and modest economic return is required, the cost of PV electricity is around0.20 euros/kWh. In 2010, a 0.1–0.3 euros/kWhprice level is anticipated (Figure 8).

[0%, 20 y]

0.15[6%, 20y]

Cost of solar heat, euro/kWh[4%, 20y]

0.1

price level in 2025

2010

100

300
400
System cost, euro/m2

2000

0.05

0

0

200

500

600

700

Figure 6. Cost of solar heat in Finland with different economic parameters andsystem costs.

22

System cost, euro/m

2

700
600
500
400
300
200
100
0
0

500

1 000

1 500

2 000

Collector area, m

2 500

3 000

2

Figure 7. Present system cost of solar heating systems versus system size.

Table 1. Estimate of cost reduction in solar heat through different factors.
Price factor

Cost effectActions needed

Practical experience in planning,
mounting and projects

10–20%

Information, training, increased
volumesStandardized system solutions

10–20%

Competition, increased volume

Logistics

10%

Cooperation

Technology development, influenceof international markets

20–30%

Technology transfer, international
cooperation

Cost of solar electricity, euro/kWh

1[0%, 50 y][6%, 20 y][6%, 50 y]

0.1

2025

2010

price level in 2000

0.01

0.001
0

2

4

6

8

10

PV investment, euro/Wp

Figure 8. Cost of solar electricity in Finland with different economic parameters and systemcosts.

23

3.4 Near future market potential
Without public support, the solar energy markets in
Finland are very limited. Commercially viable applications could be found in different niches, suchas PV for summer cottages and remote applications and solar heating for low-temperature summertime uses, e.g. for camping areas. The total sizeof these niches for solar heating is about 20 GWh/ycorresponding to 50 000 m2 of solar collectors, andfor PV we find 10 MWp or 10 GWh/y.
The Ministry of Trade and Industry has updated inJuly 2002 the investment subsidies for renewable andnew energy technology. Accordingly, solar energy
applications will now receive an investment subsidy up to 40% of the total investment. With the existing subsidy, which is mainly meant for municipalities and companies, the near term market potential for solar heating is increased to 1 490 GWh/y(3 800 000 m2) and PV to 100 GWh/y (100 MWp).
The potential would even grow if private householders would receive public support for their solar
energy investments.

The maximum or long-term potential of solar energy in Finland has been estimated as follows:
photovoltaics in buildings 5 500 GWh/y and solar
heating 4 000–5 000 GWh/y.

4 Action plan for solar energy
4.1 Road Map
Based on the international trends and markets, national state-of-the art of technology and market potential, and the national goals set for solar energy, aroad map has been built for solar energy in Finland.
The road map is a path in which milestones are defined starting from the end. To reach the milestones,
measures are set moving from start to the end.
Table 2 summarizes the key goals set in the action
plan for solar energy.
The need of public support for the action plan over
2001–2010 is in total 25 million euros.
The road map for solar energy in Finland is illustrated in Figure 9.

Table 2. Strategic goals of the action plan for solar energy.
GOALS FOR THE ACTION PLAN ON SOLAR ENERGY

24

Year

Strategic goal

TurnoverUse of solar energy
in Finland

2010

Solar energy is fully on the Finnish market
Leading position in certain market segments

150 M€/y

100 GWh/y2008

Established markets in FinlandSignificant export in EU and LDCs

100

45

2006

Solar energy is clearly on the domestic market
Export grows in the EU

40

20

2004

Solid growth of the national solar market
New export activities established

15

15

2002

Introduction of solar energy on the Finnish market
Improvement of existing technologies

Goal 20102

● 120 000 m solar heating and 22 MWp PV (total 100 GWh/v)
2● domestic market size 20 000 m /v and 6 250 kWp/y● turnover 150 million. € of which 80% export

Milestone 2006

Needs 2010

● 35-40 000 m solar heating and 5-6 MWpPV● Broad product range● Several market channels to2

in use in Finland2● domestic market size 8 000 m /y and 1.2MWp/ya range of end user groups

Needs 2008
● New custom-made solutions● Presence in Central Europe,

EU, Africa, Asia

Start 2002

Needs 2006
●
●
●
●

2

● 10 000 m solar heating and

2 800 kWp/PV use in Finland2● domestic market size 1 000 m /yand 125 kWp/ySolar integrated into legislation
Strong alliancesStandard and modular solutions
Innovative products

Needs 2004
Needs 2002
●
●
●
●
●
●
●

Public support to solar energy
Solar in aid programmes
Information and training
Visibility of solar energy
Activating key market actors
Market driven RTD
Demonstration projects

2000

2002

●
●
●
●
●
●

FSI group visible in EU
Strategic demonstrations in EU
Solar in building regulation
Strong training and education
Adequate technology products
New competitive advantage

2004

Figure 9. The road map for solar energy in Finland.

2006

2008

2010

25

4.2 Finnish Solar Industries

4.4 End goal in 2010

One important outcome of the project has been theestablishment of the Finnish Solar Industries (FSI)
working group, which comprises strategic market
actors (industries, authorities, experts). FSI has
acted as a support to the present project, but will
also be an important actor group in realizing the action plan in practice. The activities of the FSI are
focused on areas that give clear added value to theparticipants such as sharing common information,
joint activities to open the markets, influencing
standards and norms, increasing the commitment
and continuity in solar development, joint representation at fairs and international events, etc.

The end goal of the action plan for solar energy isthat solar energy is competitive on the national
market in 2010 and that Finnish industries arestrongly established on the global market.

Also, FSI promotes business concept innovations
where the traditional technology development assource for innovation is broadened to include service/channel and customer target groups as well.
FSI is part of the national solar energy network established in parallel. Both networks have now about
30 organizations represented. FSI and national solar
network are coordinated by SOLPROS.
4.3 First actions in year 2002
The action plan starts in 2002 and it will be open to
all interested market actors. The structure at thisstage is virtual and the network of actors and theiractivities form the core of the practical programme
realization. The authorities support the activities
case by case. Thus, the outcome from the action
plan is very much dependent on how active the solar field itself is.
The action plan concentrates on two major segments, namely solar heating and photovoltaics.
First projects are focused on activities in which solar energy gives the best added value.
Another important objective in 2002 is to increase
the number of industries and key market actors inthe solar programme. Cooperation is important. The
Finnish Solar Industries group and solar network
are seen as an important tool and asset. Training andeducation modules will be planned together with
regional and national energy agencies.
26

The solar utilization in Finland would correspondto about 100 GWh/y (e.g. 120 000 m2 solar heatingand 22 000 kWp PV)
4.5 Impact of solar energy on
GHG emissions in Finland
If the action plan meets its goal, solar energy will
reduce the greenhouse gas emissions in Finland by
0.02–0.04 million tons of CO2 in 2010. In 2025, theimpact could be 0.3–0.7 mill. t CO2 Solar heat replaces mainly light fuel oil and PV coal fired condensing power or average electricity mix.
The CO2 reduction cost using solar energy is at the
moment well over 100 euros/ton CO2. In 2010, thecost may drop down to 10–40 euros/ton CO2 for solar heat and 100–400 euros/ton CO2 for PV. In thelong-term run by 2025, the cost could turn negative(Figure 10).

5 Conclusions
An action plan for solar energy for Finland to meetthe goals set in the National Climate Strategy and
the Programme Promoting Renewable Energy
Sources has been prepared. A road-map type of approach has been used.
The action plan includes specific actions and milestones during 2002–2010. The first challenge is instarting the implementation of the plan and in
opening the solar energy market in Finland. The
plan recognizes networking and cooperation between market actors and different target groups as
key elements in practical implementation. The
Finnish Solar Industries (FSI) working group consisting of strategic market actors was established tosupport the plan. In addition, a national solar energy network has been initiated.

500

solar heat (max: electricity)
solar heat (min: oil)
PV (max: coal)PV (min: average mix)

400

euro/tCO2

300

200

100

0

-100

2005

2010

2025

Figure 10. Cost of CO2 reduction using solar energy in Finland.

The end goal of the action plan is 100 GWh/y solar
energy in Finland and 150 million euros/y turnoverby 2010. These are about 10-fold compared topresent situation. The analyses done show, however, that with the mechanisms of public support,
which are nearly in place, the market potential forsolar energy based on costs is much larger than thetargets set. This and international trends give confidence that the challenging goals can be met.
Publications and reports made under
the project
Solpros 2001a. Aurinkoenergian teknologia- ja markkinakatsaus. [Technology and Market Review of Solar Energy. (In Finnish)]. Tekes project 594/480/00.

Solpros 2001c. Kansallinen aurinkoenergian toimenpideohjelma. [National Action Plan for Solar Energy.
(In Finnish)]. Road-map for Solar Energy Technology and Markets in Finland. Tekes-project 594/
480/00.

References
Faninger-Lund, Heidrun et al., 2000. Toward sustainable
cities: case Ekoviikki in Helsinki and its solar project. Proceedings of ISES-Europe Conference
EUROSUN 2000, Copenhagen, Denmark, June
19-23, 2000.
MTI 1999. Programme Promoting Renewable Energy
Sources. Ministry of Trade and Industry. MTI Publications 4/1999.

Solpros 2001b. Aurinkoenergia Suomen olosuhteissa ja
sen potentiaali ilmastonmuutoksen torjunnassa.
[Solar Energy in Finland and the Potential of it in
Mitigation of Climate Change. (In Finnish)]. Tekes
project 594/480/00.

27

The Possibilities of Bioenergy in Reducing Greenhouse Gas Emissions
Bioenergian mahdollisuudet kasvihuonekaasupäästöjen vähentämisessä

Satu Helynen, Martti Flyktman, Tuula Mäkinen,
Kai Sipilä, Pirkko Vesterinen
VTT Processes, Jyväskylä, Finland
VTT Prosessit, Jyväskylä

would double the power production capacity perexisting heat lead compared to the present situation. The potential for additional power production
from biomass in 2025 would be 10 TWh comparedto the level of the year 2010.

Abstract

Investments needed for R&D, timetables for commercial implementation and market volumes in Europe are estimated for each of the new technologies
in the fields of fuel and energy production. The
Finnish industry has a good position in the development of new technologies, because the traditions in
the use of bioenergy are very long and Finland has
good circumstances for demonstration projects. The
exports of new products can reach during the following years the annual level of one billion euros.

The use of bioenergy can be increased in existingand planned plants in industry, district heating andresidential buildings according to the National Action Plan for Renewable Energy Sources and Climate Strategy, the target of which is 7.8 Mtoe in2010. Compared to 1999, the growth is 1.2 Mtoe,
50% of which will be in industry, 40% in residential heating and the rest in district heating. Powerproduction would increase 3 TWh compared to
1999. The potential reduction of carbon dioxide
emissions would be 2.8–3.7 million ton CO2 compared to 1999 when replacing fossil fuels. Forest
residue from regeneration fellings and waste usedin existing plants have the lowest costs of energy
production. Additionally, the increased use ofwood fuels, like pellets or bio-oils for residential
heating, is economically competitive.

LyhennelmäWith small additional investments to existing
plants and use of biofuels with higher costs, the useof bioenergy could reach 9.5 Mtoe in 2010. The increase would be especially viable in the districtheating sector. Power production with biomass
would increase 6 TWh compared to 1999, but theincrease of the power production capacity would
not be significant. The potential reduction of carbon
dioxide emissions would be 7.4–10.9 million ton
CO2 compared to 1999. The estimate does not include reduction of greenhouse gas emission basedon the reduction of landfill gases when using waste.

Bioenergian käyttöä voidaan lisätä nykyisissä jasuunnitteilla olevissa yhdyskuntien ja teollisuuden
laitoksissa sekä kiinteistöjen lämmityksessä
Uusiutuvien energialähteiden edistämisohjelmassa ja kansallisessa ilmastostrategiassa esitettyyn
tavoitteeseen 7,8 Mtoe:iin vuoteen 2010 mennessä. Vuoden 1999 käyttöön verrattuna lisäys on 1,2
Mtoe, josta 50 % olisi teollisuudessa, 40 % kiinteistöissä ja loppuosa kaukolämmön tuotannossa.
Sähkön tuotanto lisääntyisi vuoteen 1999 verrattuna 3 TWh. Hiilidioksidipäästöjen vähennysmahdollisuus vuoteen 1999 verrattuna olisi 2,8–3,7milj.CO2 tonnia korvattaessa fossiilisia polttoaineita. Edullisimmin voidaan lisätä uudistushakkuiden hakkuutähteiden käyttöä ja jätteiden energiakäyttöä nykyisissä laitoksissa. Myös puun ja
sen jalosteiden käytön lisääminen kiinteistöjen
lämmityksessä on taloudellisesti kilpailukykyistä.

Before 2025, most CHP plants shall be replacedwith new plants, which would enable to installplants with new technologies. The most promising
opportunity is CHP technology with high powerto-heat ratios in all classes of capacity, which

Pienillä lisäinvestoinneilla nykyisiin laitoksiin ja
käyttämällä tuotantokustannuksiltaan kalliimpia
biopolttoaineita voitaisiin käyttöä lisätä jopa 9,5
Mtoe:iin vuoteen 2010 mennessä. Käytön lisäys
olisi tällöin erityisesti kaukolämmityksen tuotan-

28

nossa. Sähkön tuotanto biopolttoaineilla lisääntyisi vuoteen 1999 verrattuna lähes 6 TWh, mutta
sähkön tuotantokapasiteetti ei kasvaisi merkittävästi. Hiilidioksidipäästöjen vähennysmahdollisuus vuoteen 1999 verrattuna olisi 7,4–10,9 milj.
CO2 tonnia. Arvioissa ei ole otettu huomioon jätteiden energiakäytön aiheuttamaa kaatopaikkojen
kasvihuonekaasupäästöjen vähenemistä.
Vuoteen 2025 mennessä monia sähköä ja lämpöä
tuottavia laitoksia on korvattava uusilla, mikä
mahdollistaisi uuden tekniikan laajamittaisen
käyttöönoton. Merkittävin mahdollisuus sisältyy
uuden korkearakennusasteisen CHP-tekniikan
käyttöönottoon kaikissa kokoluokissa, jolloin sähkön tuotantokapasiteettia saadaan nykytilanteeseen verrattuna kaksinkertaisesti olemassaolevaa
lämpökuormaa kohti. Sähkön tuotantomahdollisuus biopolttoaineilla kasvaisi noin 10 TWh vuoden 2010 tasoon verrattuna.
Kehitteillä olevista polttoaineiden ja energian tuotannon tekniikoista on arvioitu tarvittava panostus,
kaupallistumisaikataulu sekä markkinoiden laajuus Euroopassa. Suomalaisella teollisuudella onuusien tekniikoiden kehittäjänä hyvä asema, koska
biopolttoaineiden energiakäytöstä suomalaisellatekniikalla on vuosikymmenien perinteet ja Suomi
tarjoaa hyvät puitteet uusien tekniikoiden demonstrointiin. Uusien tuotteiden vienti voi jo lähivuosina kohota miljardiin euroon vuodessa.

1 Introduction
The National Action Plan for Renewable Energy
Sources (MTI 1999) and Climate Strategy (MTI
2001) have set the target to increase the use of renewable energy sources (RES) by 50% in the period 1995–2010. 80% of the increase would becovered by bioenergy. RES would correspond to
27% of the primary energy consumption and 31%of the electricity production in 2010.
The aim of this study is to update and improve theinformation concerning bioenergy that was givenin the background report of the National Action
Plan (Helynen et al. 1999). The possibilities of thepresent technology and its costs by 2010 are described, and possibilities of the new technologies
up to 2025 are estimated. Research and development demands and potential markets of new technologies are identified. The potential reduction ofgreenhouse gas emissions is calculated based on
the replacement of fossil fuels.

2 Biomass resources
The present use of bioenergy is dominated by residues and by-products from the forest industry (Table 1). Also the use of firewood is significant. The
use of harvesting residues and waste has recently
started.

Table 1. The use of bioenergy based fuels in Finland in 2000.
Mtoe

TWh

Share of the energy
consumption in FinlandBlack liquor

3.4

40

11

Solid biofuels, of which

2.0

23

6

• bark1.2

14• saw dust, etc

0.4

5• logging residues

0.1

1.5

Fire wood

1.1

13

3

Wood fuels, total

6.5

76

20

Waste

0.02

0.28

Biogas

0.02

0.2

Peat

1.4

16

4

29

The availability of different biomass resources are
estimated for 15 areas of Finland for six types ofbiomass based fuels that have different cost levels(Tables 2 and 3). Two different scenarios have beencreated. The Basic Scenario introduces the situation with continuation of the present policy including promotion activities of RES. The Maximum
Scenario is connected to the improvement of competitiveness of bioenergy, which could allow a cost
increase of 50% on fuel compared to the present
situation. Also the availability of peat is introduced
because it can smooth variations in the availability
and quality of biomass based fuels.
Residues of the forest industry, such as bark andsaw dust, are presently utilised totally. Their future
amount will depend on the volume of productionlevel that can grow slowly because the growth offorests is still increasing. Annual changes of the production level are significant, which has a great effecton the availability of residues in the fuel market.
Harvesting residues from spruce dominated fellings
and waste are the greatest low-cost biomass reserves
for energy production. Residues from thinnings

and agrobiomass, such as straw and reed canary
grass, have higher production costs. Biomassbased fuels resulted from waste handling are studied in a report (Lohiniva et al. 2002) written inclose conjunction with this study.
Biomass resources are not located evenly geographically. Residues from the forest industry arenaturally adjacent to mills, harvesting residues toforests and their logging operations, agrobiomass
to the fields and waste to urban areas. Another important factor is the close distance between biomass resources and heat demands, such as district
heating networks and industry.
Import and export possibilities are most viable inthe coast of Finland. The market volumes have so
far been quite limited, below 1 TWh annually, butthey are increasing. Especially refined fuels, suchas pellets, allow longer transportation distance andlong-term storage. About 80% of the pellet production has been exported to Sweden, Denmarkand other European countries. Wood chips are imported by trucks from Russia, where cheap returntransportations have been utilised.

Table 2. Availability and costs of biomass-based fuel (without black liquor and fire wood) inthe Basic Scenario.

30

2010
TWh/a

2025
TWh/a

Average cost
level
€/MWh

Residues and by-products from forest
industry

20.5

22.6

5–6.7

Harvesting residues from spruce
dominating fellings

4.9

4.9

6.7–9.3

Harvesting residues from pine
dominating fellings

2.8

2.8

8.4–9.3

Thinnings and young stands

1.4

1.4

9.3–13.5

Wood fuels, total

29.7

31.7

Waste fuels

5.0

5.0

Agrobiomass

00Solid biomass based fuels, total

34.7

36.7

Peat

22.8

22.8

n.a.

Table 3. Availability and costs of biomass-based fuel (without black liquor and fire wood)in the Maximum Scenario.
2010
TWh/a

2025
TWh/a

Average cost
level
€/MWh

Residues and by-products from forest
industry

23.6

27.1

5–7.6

Harvesting residues from spruce
dominating fellings

7.2

7.2

6.7–10.1

Harvesting residues from pine dominating
fellings

3.3

3.3

8.4–10.1

Thinnings and young stands

9.5

9.5

9.3–13.5

Wood fuels, total

43.6

47.1

Waste fuels

10.0

10.0

n.a.

Agrobiomass

1.5

1.5

13.5

Solid biomass based fuels, total

55.0

58.5

Peat

22.8

22.8

3 Use of bioenergy with present
technologies
Possibilities to use bioenergy have been investigated separately in 700 cases. They include largescale consumers: district heating networks, industrial enterprises and others, and most of them presently use bioenergy. Existing energy production
plants and their age and operation values have beencollected, and changes for their future energy demands have been estimated. The use of fire woodhas been calculated based on the estimations onbuilding volume, specific energy consumption andthe market share of wood firing as a supplementaryor main energy supply.
In the Basic Scenario the use of biomass have been
increased in plants where it is possible with existing equipment. New plants are built when old units
are aging. Combined heat and power (CHP) plants

and biomass boilers replacing oil burners are built
when the heat demand is over the chosen limits. In
the Maximum Scenario minor investments are carried out to maximize the use of bioenergy in the existing boilers. Seven pulverized coal boilers areused for co-firing with 2–3% biomass. Bioenergy
is not estimated to replace economically natural
gas in either scenarios.
In the Basic Scenario the use of bioenergy in 2010
is estimated to be the same as in the National Action Plan on RES (Figure 1). The increase of power
production is quite modest, 3 TWh/a. Available
bioenergy resources and demand are in balance inwhole Finland but regional variations exist. The useof bioenergy in the Maximum Scenario is 20 TWh
greater and the power production is 3 TWh greaterthan in the Basic Scenario in 2010 (Figure 2). Excess amount of available biomass is 12 TWh.

31

90
80
70

Peat
Agrobiomass
REF

TWh/a

60

First thinnings
Final fellings (pine)
Final fellings (spruce)
Industrial by-products

50
40

Need for domestic fuels
Possibilities ofwood usage

30
20
10
0

1999

2005

2010

2025

Figure 1. Potential use of bioenergy in large-scale use without black liquor, compared to the availability of biomass in the Basic Scenario.

90
80
70

Peat
Agrobiomass
REF

TWh/a

60
50

First thinnings
Final fellings (pine)
Final fellings (spruce)
Industrial by-products

40
30

Need for domestic fuels
Possibilities ofwood usage

20
10
0

1999

2005

2010

2025

Figure 2. Potential use of bioenergy in large-scale use without black liquor, compared to the availability of biomass in the Maximum Scenario.

32

4 New technologies
The development of bioenergy technologies isconnected to better competetitiveness that means
better efficiency, higher power-to-heat ratios, andlower investment and maintenance costs. Of
course, the reduction of emissions is still important, especially emission of fine particles and emissions from waste incineration.
4.1 Fuel harvesting and handling
The costs of biomass-based fuels can still be reduced significantly with modern harvesting, logistics and fuel handling systems. Drying and compacting of biomass reduces transportation costs
and also the size of energy production equipment.
Production of liquid biofuels also improves possibilities to deliver bioenergy to private customers,
and even to use it in traffic.
4.2 Residential heating
The use of biomass, e.g. using wood logs, chips orpellets in residential heating (20 kW–1000 kW), iscompetitive compared to the use of light fuel oil(price level 40 €/MWh). However, wood is seldom

chosen as the primary source of heating energy, because the investment costs are higher and more attention is needed for operation and maintenancethan with oil heating. The development work is concentrated on those disadvantages of wood heating.
4.3 Small-scale CHP plants
In small scale, under 15 MWe, the following concepts will be available for CHP plants
1. Steam boiler and steam turbine/engine
2. Gasifier, steam boiler and steam turbine
3. Gasifier and combustion engine/gas turbine(Figure 3)
4. Flash pyrolyser and combustion engine/gas
turbine5. Stirling engine
6. ORC (Organic Rankine Cycle) turbine
7. Biogas reactor/landfill gas and combustion
engine.
Gasifiers connected to combustion engine could
provide higher power-to-heat ratios than the presently dominating steam boiler – steam turbine concept, if the product gas can be cleaned efficiently.
Centralized production of flash pyrolysis use andits transportation to decentralized diesel engines

Small-scale power plant based on fixed-bed
gasifier and gas engine

Biomass

Air

Technical data
Wood input
Power output
Heat production

3.3 MW
1.2 MWe
1.73 MWPower efficiency
Heat efficiency
Total efficiency

36.0 %
52.5 %
88.5 %

Economical data
Investment
Specific investment

2.5 MEUR
750 EUR/kWfuel
2 100 EUR/kWe
47 EUR/MWePower production costs(fuel 5 EUR/MWh, heat price 22 EUR/MWh)
Air
Catalytic
tar removal

Mäkinen, Kurkela,Hepola & Solantausta.
Techno-economic studies on gasification-based energy
production concepts and survey on market perspectives in Europe
VTT Energy. Research Report ENE1/50/2000. Espoo 2000.

Figure 3. Fixed bed gasifier and combustion engine.

33

could also be competitive compared to present alternatives. Research work connected to fuel cells isincreasing, but the use of biomass still requires several years of R&D.
4.4 Large-scale CHP plants
Co-firing of biomass in existing pulverized coal
fired boilers has several concepts that need still
more development work. Direct co-firing with existing equipment has typically limited the share ofwood to less than 5%, but a special burner construction and modifications with fuel handlingequipment can increase the share. High shares canbe attained by means of boiler modifications to
fluidised bed or by connecting a separate gasifier
or boiler to the existing boiler.
The fluidised bed technology connected to highsteam values can increase power-to-heat ratios(over 0.5) compared to conventional concepts. The
pressurized fluidized bed combustion (PFBC) concept can achieve the ratio of 0.55–0.7, and the concept can be further improved by the topping cyclewith partial gasification and pressurized combustion. Integrated gasification combined cycle(IGCC) could reach power-to-heat ratio of 0.8–1.2
in the capacity range of 40–100 MWe using solid
wood fuels. The next phase of development workof IGCC is the large-scale demonstration plant.

Pressurised gasification of black liquor will stillneed several years of intensive research and development work before commercial implementation.

5 Potential on reduction ofgreenhouse gas emissions
Biomass resources are ample in Finland, but alternative possibilities for the use of bioenergy withreasonable cost levels are even higher than the resources. If the price of electricity is high or theshare of RES in electricity is increased, biomass
will be directed to CHP plants, also in smaller capacity classes than before. If the CO2 emissions aretaxed in heat production or the price level of fossil
fuels increases, oil will be replaced in the heating
sector and coal will be replaced in coal fired CHP
plants. Legislation can also require a significant
share of biomass resources used for biofuels in the
traffic sector.
The potential CO2 reduction with bioenergy has
been calculated assuming that light fuel oil is replaced in the residential heating sector. and alternatively natural gas or coal is replaced in the sectors of district heat and industry. In the next few
years, the major increase in the use of bioenergy is
anticipated to occur in CHP plants and in the heating sector (Table 4).

Table 4. Potential increase on the use of bioenergy by consumer sectors and its reduction potential on CO2 emissions.

34

Consumer sector

Scenario

Potential addition of
bioenergy use
in 1999–2010, TWh

Reduction potential
on CO2 emissions,million tons

Residential heating

Basic
Maximum

5.8
9.3

1.4
2.2

District heating

Basic
Maximum

1.8
13.8

0.4–0.6
2.8–4.7

Industry

Basic
Maximum

6.7
11.8

1.4–2.3
2.4–4.0

TOTAL

Basic
Maximum

14.3
34.9

2.8–3.7
7.4–10.9

Available additional
biomass

Basic
Maximum

13
38

on price levels on fuel market in different countries
can change the market situation dramatically.

6 Discussion
The potential of bioenergy has been analysed in
two scenarios with several assumptions that havesignificant effects on the competitiveness. However, there are several aspects that have not been
analysed and that may have great effects on the actual use of bioenergy. One of the major single factors in Finland is the production level of the forest
industry, because forest industry presently covers
about 80% of the use of bioenergy and provides
about 80% of the biomass-based fuels in Finland.
In Finland, bioenergy resources are ample but notunlimited. Legislation and other international andnational measures can dramatically guide how biomass is used: alone or in co-firing, or in heating,power production, production on refined fuels(pellets, briquettes, bio-oils) for private consumers
or transportation fuels. Respectively, those measures affect the volume of bioenergy market andespecially the volume of exports and imports. Possible major exporters in Europe include Baltic
countries and Russia, but also tropic countries withhigh annual growths of biomass. High differences

7 Conclusions
The possibilities to increase the use of bioenergy
by over 50% in 1999–2010 exist, and consequently
potential reduction on CO2 emissions is significant, 3–11 million tons of CO2. The developmentof new technology is an efficient way to reduce thecosts of that. New technologies are needed to allow
high power-to-heat ratios in CHP plants, to makesmaller CHP plants competitive and to provide low
emission levels and to ease operation and maintenance for private consumer applications.
The year of commercial implementation, the needof development and demonstration work and thevolume of commercial market in Finland and othercountries are estimated for 24 bioenergy technologies (Table 5). The choice of the technologies isbased on the facts that the development of technologies is important for Finland.

Table 5. Development programme for bioenergy technologies.
Technology,
Power-to-heat ratio

Year ofcommercial
implementation

R&D need anddemonstration
investments

Business volume in
Finland and in othercountries by 2010

Cofiring in pulverized coalboilers,
0.5

Before 2005

1–3 demonstrations,
2–10 M€/plant

FIN: 15 plants
Europe: several hundreds

New fluidised bed boilers
0.5

Before 2010

1–3 demonstrations,
125 M€/500 MW boiler

FIN: 10 plants
Europe: tens of plants

New recovery boilers
0.35

Before 2010

1–3 demonstrations,
85 M€/200 MW boiler

FIN: 5 plants
Europe: tens of plants

Gasification of biomass andgas cleaning with waste fuels
0.5

Before 2010

1–3 demonstrations,
35 M€/100 MW gasifier

FIN: 10 plants
Europe: tens of plants

IGCC
0.7-1.02010

1–3 demonstrations,
85 M€/100 MW (fuel)FIN: 1–3 plants
Europe: tens of plants

Large-scale CHP

35

… Table 5. continues

Technology,
Power-to-heat ratio

Year ofcommercial
implementation

R&D need anddemonstration
investments

Business volume in
Finland and in othercountries by 2010

PFBC
0.7-1.0

2010

R&D,
Demonstration 2005
125 M€/200 MW (fuelFIN: 1–3 plants
Europe: tens of plants

Pressurised gasification of
black liquor

After 2010

R&D
Demonstration phase byphase 2005-2010

Grate boiler and steam
engine/turbine
0.15-> 0.25

2005

1–3 demonstrations,
4 M€/2.5 MWe

FIN: tens of plants
Europe: several hundreds

Fluidised bed boiler andsteam turbine
0.3-> 0.4-0.5

2005

1–3 demonstrations,
7 M€/5 MWe

FIN: 10 plants
Europe: several hundreds

Fixed-bed gasifier andgas-cleaning for
combustion engine
0.6-0.8

2005

1–3 demonstrations,
3.5 M€/2 MWe

FIN: tens of plants
Europe: several hundreds

Pyrolysis oil andcombustion engine
0.6-0.8

2005

1–3 demonstrations,
3.5 M€/2.5 MWe

FIN: tens of plants
Europe: several hundreds

ORC process2005

1–3 demonstrations,0.35 M€/0.2 MWe

FIN: tens of plants
Europe: several hundreds

Fuel cells

2005-2010

R&D,
demonstrations fordifferent applications

Depending of applications: thousands –hundreds of thousands

Grid connection for
distributed energy
production

2005-2010

R&D,
demonstrations fordifferent capacity classes

Depending of applications: thousands –hundreds of thousands

Residential heating andrefined fuels

R&D needs

R&D need anddemonstration
investments

Business volume
in Finland and in othercountries by 2010

Fire places

Emissions,efficiency, O&M

Development of new
products

FIN: thousands
Europe: tens of
thousands

Automatic heating systems

Emissions,efficiency, O&M

Development of new
products

FIN: thousands
Europe: tens of
thousands

Production of pellets andother densified products

Quality, raw material, Demonstration at 1–3
drying, energy confactories,
sumption
2–3.5 M€/factory

Small-scale CHP

36

FIN: tens of factories
Europe: hundreds offactories

… Table 5. continues

Technology,
Power-to-heat ratio

Year ofcommercial
implementation

R&D need anddemonstration
investments

Business volume in
Finland and in othercountries by 2010

Production of pyrolysis oil

Production process,quality, distribution,
storagingR&D,
1–3 demonstrations at
1–3 factories,
8.5 M€/20 MW

FIN: 0.6 Mtoe in
10 plants
Europe: tens of plants

Production of biofuels,
especially using residues ofthe forest industry

Production process,quality, distribution,
storagingR&D,
demonstrations

FIN: several plants
Europe: tens of plants

Production and harvesting
technologies ofbiomass-based fuels

R&D needs

R&D need anddemonstration
investments

Business volume
in Finland and in othercountries by 2010

Forest chips fromregeneration fellings

Optimisation of
production chains,
quality, storaging

Development ofequipment and chains,
0.3–0.5 M€/chain

FIN: tens of chains
Europe: several hundredsof chains

Forest chips fromyoung stands

Development ofsimple equipment,
optimisation of
production chains

Development ofequipment and chains,
0.1–0.3 M€/chain

FIN: 100
Europe: several
hundreds of chains

Chips and logs forresidential heating

Quality, storaging,
distribution

Development ofequipment and chains,
0.02–0.08 M€/chain

FIN: hundreds of chains
Europe: thousands ofchainsAgrobiomass

Harvesting, intgration Development of
to fibre production or equipment and chains,
to water
0.2–0.35 M€/chain
purification

Residues from industry

Quality improvement
by drying, production
biofuels and pellets

Publications and reports made under
the project
Helynen, S., Flyktman, M., Mäkinen, T., Sipilä, K., Vesterinen, P. 2002. Bioenergian mahdollisuudet kasvihuonepäästöjen vähentämisessä. [The possibilities of bioenergy in reducing greenhouse gases. (InFinnish, with English abstract)]. Technical Research Centre of Finland, Espoo. VTT Research
Notes 2145. 110 p. + app. 2 p. ISBN 951-38-6055-X;
951-38-6055-8. http://www.inf.vtt.fi/pdf/tiedotteet/2002/T2145.pdf

Development ofequipment 0.02–3.4 M€

FIN: tens of chains
Europe: thousands ofchains
FIN: tens of chains
Europe: several hundredsof chains

References
Lohiniva, E., Sipilä, K., Mäkinen, T., Hietanen, L. 2002.
Jätteiden energiakäytön vaikutukset kasvihuonekaasupäästöihin. [Waste-to-energy and green housegas emissions. (In Finnish, with English abstract)].
Technical Research Centre of Finland, Espoo. VTT
Research Notes 2139. 119 p. ISBN 951-38-5889-8;
951-38-5890-1. http://www.inf.vtt.fi/pdf/tiedotteet/2002/T2139.pdf
MTI 1999. Action Plan for Renewable Energy Sources.
Ministry of Trade and Industry, Publications 1/1999.
MTI 2001. National Climate Strategy. Finland. Government Report to Parliament. Ministry of Trade andIndustry, Finland. Publications 5/2001. 99 p.

37

Distributed Energy Production: Technology, Fuels, Markets, CO2 Emissions
Hajautettu energiantuotanto: teknologiat, polttoaineet, markkinat ja CO2-päästöt

Eero Vartiainen, Päivi Luoma,
Jari Hiltunen, Juha Vanhanen
Gaia Group Oy, Helsinki, Finland
Gaia Group Oy, Helsinki
Abstract
In this paper, distributed energy production (DEP)
technologies, fuels, market potential, and the possibilities for the reduction of the CO2 emissions
have been studied. Here, energy production fromrenewable energy sources (RES) or small-scale
combined heat and power (CHP) with a nominal
power of less than 10 MW is defined as DEP. Of the
RES for distributed electricity generation, hydropower and, in the near future, wind power are themost competitive in Finland. However, the growthof hydro and wind power is restricted by water conservation and land use legislation. In distributed
heat production, biomass is already used widely in
Finland. Of the CHP technologies, gas and diesel
engines are the most competitive at the moment.
The growth of all CHP technologies is restricted by
the availability and price of the fuel. In Finland,
CHP systems based on biomass fuels will become
significant in the future.
In the market scenarios presented in this report,
biomass boilers have the largest potential in Finland in the near future. In the long term, wind
power also has a great potential. In the scenario
based on the Finnish Action Plan for Renewable
Energy Sources (APRES) and moderate development of small-scale CHP, hydro power is also significant. In the long term, solar energy and heatpumps will also become significant. Of the CHP
technologies, the systems of the 1–10 MW scale
have the greatest potential at the moment. In thelong term, the smaller CHP systems will also become significant.
The potential of DEP for CO2 emission reductions
has been calculated based on the estimated market
38

potentials. The aggregate CO2 emission reduction
potential of all DEP technologies (compared withthe emissions of the year 2000 in Finland) is 0.5–
1.2 Mt in 2010 with the current growth scenario,
depending on whether the distributed electricity
generation replaces the current average electricity
generation or coal condensate power. In the
APRES and moderate development of small-scale
CHP scenario, the reduction potential would be
1.2–3.8 Mt in 2010. Compared with the current
CO2 emissions from the use of fossil fuels and peat
(58 Mt, on the average during 1996–2000) and the
Kyoto target of reducing the emissions to the 1990
level (54 Mt), distributed energy production cansignificantly further the realisation of this target.
Lyhennelmä
Tässä raportissa on esitetty hajautetun energiantuotannon teknologiat, polttoaineet, markkinapotentiaali sekä mahdollisuudet CO2-päästöjen vähentämiseen. Hajautetuksi tuotannoksi on tässä
katsottu nimellisteholtaan alle 10 MW:n uusiutuviin energialähteisiin tai yhdistettyyn sähkön ja
lämmön tuotantoon (CHP) perustuva tuotanto.
Sähköntuotantoon käytettävistä uusiutuvista energialähteistä kilpailukykyisimpiä ovat tällä hetkellä
vesivoima ja lähitulevaisuudessa myös tuulivoima.
Niiden kasvua rajoittavat kuitenkin vesistönsuojelu- ja maankäyttörajoitukset. Lämmöntuotannossa
biomassaa käytetään jo nykyisin Suomessa merkittävästi. CHP-teknologioista tällä hetkellä kilpailukykyisimpiä ovat kaasu- ja dieselmoottorit.
Kaikkien CHP-teknologioiden kasvukehitystä rajoittaa polttoaineen saatavuus ja hinta. Suomen
oloissa merkittäväksi nousevat tulevaisuudessa
biomassapohjaiset CHP-ratkaisut.
Tarkastelluissa markkinaskenaarioissa suurin potentiaali Suomessa on biomassakattiloilla, pitkällä
tähtäimellä myös tuulivoimalla. KTM:n Uusiutuvien energialähteiden edistämisohjelmaan sekä
pienimuotoisen CHP:n kohtuulliseen kehitykseen

perustuvassa skenaariossa myös pien- ja minivesivoima tulee merkittäväksi, pitkällä tähtäimellä
myös aurinkoenergia ja lämpöpumput. CHP-teknologioista suurin markkinapotentiaali on kokoluokan 1–10 MW ratkaisuilla. Pitkällä tähtäimellaalle 1 MW:n CHP-teknologioidenkin potentiaalin
arvioidaan kasvavan.

The study is based on a thorough literature review
and expert interviews. The main references havebeen the European Commission White Paper (EC1997), IEA World Energy Outlook (IEA 2000),and Finnish Ministry of Trade and Industry Action
Plan for Renewable Energy Sources and its background report (Helynen et al. 1999).

Tässä raportissa arvioitujen markkinapotentiaalien perusteella on laskettu hajautetulla energiantuotannolla saavutettavissa oleva CO2-päästövähennys Suomessa. Kaikkien teknologioiden avulla
saavutettava yhteenlaskettu päästövähennys vuoteen 2000 verrattuna olisi hajautetun energiantuotannon kohtuulliseen kehitykseen perustuvassa
skenaariossa 1,2–3,8 Mt vuonna 2010, riippuen
siitä korvataanko hajautetulla sähkön-tuotannolla
nykyistä keskimääräistä sähköntuotantoa vai hiililauhdetta. Verrattuna nykyisiin fossiilisten polttoaineiden ja turpeen energiankäytön aiheuttamiin
CO2-päästöihin (keskimäärin 58 Mt vuosina 1996–
2000) ja Kioton sopimuksen mukaiseen tavoitteeseen palauttaa Suomen päästöt vuoden 1990 tasolle (54 Mt), voidaan hajautetulla energiantuotannolla edistää merkittävästi tämän tavoitteen toteutumista.

The study is divided into three parts: survey of DEP
technologies and fuels (section 2), assessment ofmarket potential (section 3) and potential for CO2
emission reductions in Finland (section 4). The following renewable energy sources and small-scale
CHP technologies are included in the study:

1 Introduction
Distributed energy production (DEP) is a fastgrowing sector of energy technology. In this paper,
the DEP technologies, fuels, market potential, andpossibilities to reduce CO2 emissions are studied.
The study is a part of the Finnish Technology andClimate Change Programme (Climtech) and has
been funded by the Finnish Technology Agency(Tekes), Gaia Group Oy, Finnish Energy Industries
Federation (Finergy), Finnish Natural Gas Association, Technology Centre Oy Merinova Ab,
Sermet Oy (Wärtsilä), and Waterpumps WP Oy.
In this study, energy production from renewableenergy sources (RES) or small-scale combined
heat and power (CHP) with a nominal power ofless than 10 MW is defined as DEP. Furthermore,wind parks with a total capacity of more than 10
MW are included in this study. Note that the possible effects of different DEP technologies on eachother are not taken into account.

Renewable energy sources:• wind power• hydro power• solar energy (photovoltaics and solar thermal)• heat pumps• biomass boilers.
Small-scale CHP:
• gas and diesel engines• microturbines• stirling engines• fuel cells• steam turbines and engines.

2 Distributed energy technologies
and fuels
The main performance and economic parametersof each distributed energy production technology
are summarised in Table 1. Of the renewable energy sources for distributed electricity generation,hydro power and, in the near future, wind power
are the most competitive in Finland. Especially,hydro power is competitive in sites where the utilisation time is over 4000 h. Wind power production
cost is expected to drop down to 3 c/kWh in 5–10
years. However, the growth of hydro and wind
power is restricted by water conservation and land
use legislation. At the moment, photovoltaics (PV)is competitive only in special remote applications,but the price of PV is expected to go down in thelong term. The technological potential of both PV
and wind power is huge.
39

Table 1. Summary of renewable energy sources and small-scale CHP technologies.
Unit power(kW)1

Electric
efficiency(%)

Thermalefficiency
(%)

(a)

Utilisation
time
3
(h)

Investment
cost
4(euro/kW)

Production
cost
5(c/kWh)Life time2

Wind power

0.1–2500

40–50

–

20

2500

900–1100

4–5

Hydro power

20–10000

80–85

–

30

4000

1200–2000

2.5–4

Photovoltaics

0.004–0.1

4–12

–

25

1000

6500–10000

45–70

Solar thermal

0.3–0.8

–

30–40

20

1000

800–1600

7–14

Heat pumps

4–45

–

60–75

20

3000

900–1800

4–8

Biomass
boilers

10–10000

–

70–90

20

1000/3500

100–200

1–5

Diesel andgas engines

3–10000

30–45

45–50

15

5000

450–1400

2.5–4

Microturbines

25–250

15–35

50–60

15

5000

1000–1700

3–4

Stirling engines

0.5–25

15–35

50–60

15

5000

1400–2200

4–5

Fuel cells

0.5–2000

38–55

30–45

15

5000

2800–4400

5–8

Steam engines
and turbines

0.5–10000

15–35

40–70

15

5000

1500–3000

3–4

1

Unit power is given as electric power, except for solar thermal, heat pumps, and biomass boilers as thermal power.
The unit power can exceed 10 MW in some technologies, but this report includes only distributed energy production
below 10 MW. Wind parks with total capacity over 10 MW are included.
2Lifetime varies in practice by plant. The value given here is used for the production cost calculation.

3

Utilisation time varies in practice by year, by plant, and by site. The value given here is used for the calculation of
the production cost and the CO2 emission reduction potential (section 4). The utilisation time for biomass boilers is1000 h in small combustion and 3500 h in district heating.
4

Investment cost is given per electric power, except for solar thermal, heat pumps, and biomass boilers per thermal
power. For CHP technologies, the investment cost is per electric power, but the given cost also includes thecomponents related to the heat production.
5

Production cost is given per produced energy unit including both electricity and heat for CHP technologies. For
heat pumps, the production cost is given per net heat. The production cost is given without any tax reductions orinvestment subsidies. The production cost is calculated by discounting the investment cost over the lifetime of thepower plant with the annuity method and 5% interest rate. The average 2001 wholesale price of natural gas in
Finland (1.7 c/kWh) has been used as the fuel cost for the CHP technologies. For the CHP technologies, thepower/heat ratio of 0.8 has been used for diesel and gas engines, 0.6 for microturbines and stirling engines, 1.0 for
fuel cells, 0.6 for steam turbines, and 0.2 for steam engines. As there are many uncertainties regarding e.g. thelifetime, utilisation time, power/heat ratio, investment cost, and fuel price fluctuations, the estimates presented here
only show the order of magnitude of the costs.

40

The feasibility of various fuels for different CHP
technologies is evaluated in Table 2. The evaluation is based mainly on the technological feasibility. All fuels are feasible for Stirling engines andsteam engines and turbines, but most of them are
not used in commercial CHP plants. Fuel cells
have few commercial applications at the monment,
most of them use hydrogen which is reformed fromnatural gas or methanol. The most important fuelfor gas engines and microturbines is natural gas,
diesel engines use diesel oil. Biomass or waste
gasification is also a promising future solution, especially for gas engines in Finland.

In distributed heat production, biomass is alreadycompetitive and is widely used in Finland. The potential of biomass utilisation is mainly restricted by
the availability of fuel at a competitive price. Solar
heating and heat pumps are not yet competitive
with biomass, but their potential is also great. The
use of solar energy is restricted by the long winterin Finland.
Of the CHP technologies, gas and diesel engines are
the most competitive at the moment. Moreover,microturbines are feasible in small (below 100 kW)
scale CHP. Fuel cells are expected to be significant
in the long term, as their price is assumed to be reduced with mass production. The growth of all CHP
technologies is restricted by the availability andprice of the fuel. In Finland, CHP systems based on
biomass fuels will be significant in the future.

Table 2. Feasibility of various fuels for different small-scale CHP technologies.
Diesel andgas engines

Micro-turbines

Stirling
engines

Fuel cells

Steam engines
and turbines

Coal

•

•••

Peat

•

•••

Waste fuels• •(gasified)• •(gasified)••(gasified)•••

Solid biomass• •(gasified)• •(gasified)•••(gasified)•••

Diesel oil

•••

•••

••

Gasoline

•

••

••

Heavy fuel oil

•••

•

•

•

Orimulsion

••

•

•

•

Methanol

•

••

••

••

•

Ethanol

•

••

••

••

•

Bio oils

••

••

••

LPG

••

•••

••

••

•

Hydrogen

••

••

••

•••

•

Natural gas

•••

•••

•••

•••

•

Bio gases

•••

••

••

••

•

•
••

•

•

• • • = commercially significant fuel at the moment• • = possibly commercially significant fuel in the future• = technologically feasible but probably not commercially significant fuel41

potential in the short term, but wind power is themost significant technology in the long term. In
scenarios 2 and 3, hydro power is already significant, in the long term, solar energy and heat pumps
become also significant. Of the CHP technologies,
1–10 MW systems have the greatest potential at the
moment. In the long term, the potential of smaller(< 1 MW) systems is expected to grow.

3 Market potential of distributed
energy technologies
In the market survey of this study, the technological, economical, and market potential of each technology has been assessed in the short (to 2005), themiddle (2005–2010), and the long term (2010–2020). The potential of the different CHP technologies is assessed as a whole. Economical potential
is defined as the part of the technologically feasible
potential that is profitable to be carried out. Market
potential is the part of the technological and economical potential that can be reached in each market situation. The market potential of each technology in Finland is assessed in three scenarios. Scenario 1 corresponds to the current market growth ofeach technology. Scenario 2 is based on the Action
Plan for Renewable Energy Sources (APRES, by
the Finnish Ministry of Trade and Industry) andmoderate growth of the CHP technologies. Scenario 3 is equal to the economical potential foreach technology.

In the APRES scenario (2), it is possible to build
900 MW new electric power capacity and 1200
MW new heat power capacity by 2010. With thesecapacities installed in 2010, it is possible to produce 3.1 TWh more electricity and 3.5 TWh moreheat than in 2000. By 2020, it would be possible tobuild 2900 MW new electric power capacity and3100 MW new heat power capacity. With these capacities installed in 2020, it is possible to produce
9.1 TWh more electricity and 9.2 TWh more heatthan in 2000.
The worldwide growth of energy production also
creates export markets for the Finnish technologies
and know-how. Of the distributed energy production technologies, the greatest growth is expected
in wind power, solar energy, biomass, and smallscale CHP. In these technologies, wind power

The cumulative market potentials for each distributed electricity production technology is presented
in Figure 1, and for each heat production technology in Figure 2. Biomass boilers have the greatest

2000–2005

2005–20102010–2020

2 500

MW

2 000

1 500

1 000

500

0
1

2
Wind power

3

12
Hydro power

3

1

2
Photovoltaics

3

1

2

3

CHP electricity

Figure 1. The cumulative market potential of distributed electricity production (< 10 MW) in
Finland in scenarios 1, 2, and 3.

42

2000–2005

2005–20102010–2020

2 500

MW

2 000

1 500

1 000

500

0
1

2
Solar thermal

3

12Heat pumps

3

1

2
Biomass boilers

3

1

2

3

CHP heat

Figure 2. The cumulative market potential of distributed heat production (< 10 MW) in Finlandin scenarios 1, 2, and 3. For CHP technologies, the power/heat ratio of 0.8 is assumed.

components, biomass fuels and combustion technologies, and gas engines are the strongest sectors
in Finland. Moreover, hydro turbines/generators,
and solar and fuel cell systems are potential export
technologies. Distributed energy production willplay an important role in the growth of the Finnish
energy technology exports in the future.

4 CO2 emission reduction potential
in Finland
The potential of distributed energy production in
reducing the CO2 emissions (compared with theemissions in 2000 in Finland) has been calculated
based on the market potentials estimated in this study.
The CO2 emission reduction potential has been calculated in two different comparisons: distributed
electricity production replaces current average electricity production (200 kg CO2/MWh) in comparison
A and coal condensate power (850 kg CO2/MWh)in comparison B. The distributed heat production
replaces mainly light fuel oil (300 kg CO2/MWh)in both comparisons. The comparisons A and B
give the lower and upper limits for the CO2 emission reduction potentials, the actual emission reductions will be between these limits. Note that theestimates in this report cannot be summed up withestimates presented in other reports, because theestimates in different reports might be overlapping.
The CO2 emission reduction potentials in different
scenarios in Finland in 2005, 2010, and 2020
(compared with the 2000 emissions) are presented
in Figure 3 (with comparison A) and in Figure 4(with comparison B).
In comparison A, especially wind power and solar
energy are relatively less important than in themarket scenarios, because these technologies havea lower utilisation time than the other technologies.
Accordingly, CHP technologies are more important because they have a high utilisation time. Biomass boilers are also relatively important, because
the light fuel oil replaced by the biomass has larger
nominal CO2 emissions than the average electricity
production replaced by the other renewable energy
sources.
In comparison B, biomass boilers are relatively
less important than in comparison A, because their
CO2 emission reduction potential remains thesame while the potential of the other renewable energy sources more than quadruples.
43

The aggregate cumulative market potentials, theadditional electricity and heat production withthese potentials, and CO2 emission reduction potential of all distributed energy production technologies is presented in Table 3. Compared with theCO2 emissions in 2000 in Finland, the reduction
potential is 0.5–1.2 Mt in 2010 with the current
growth scenario (1), depending on whether the distributed electricity generation replaces the current
average electricity generation or coal condensate

2005

power. In the APRES and moderate developmentof small-scale CHP scenario (2), the reduction potential would be 1.2–3.8 Mt in 2010. Comparedwith the current CO2 emissions from the use of fossil fuels and peat (58 Mt, on the average during
1996–2000) and the Kyoto target of reducing theemissions at the 1990 level (54 Mt) (Statistics Finland 2001), distributed energy production can significantly further the realisation of this target.

2010

2020

1,6

Mt

1,2

0,8

0,4

0,0
1

2

3

Wind power

1

2

3

Hydro power

1

2

3

1

2

3

1

Heat pumps

Solar energy

2

3

Biomass
boilers

1

2

3

Small-scale
CHP

Figure 3. CO2 emission reduction potential of distributed energy production (< 10 MW) in
Finland (compared with emissions in 2000), comparison A (average electricity).

2005

2010

2020

5,0
4,0

Mt

3,0
2,0
1,0
0,0
1

2

3

Wind power

1

2

3

Hydro power

1

2

3

Solar energy

1

2

3

Heat pumps

1

2
Biomass
boilers

3

1

2

3

Small-scale
CHP

Figure 4. CO2 emission reduction potential of distributed energy production (< 10 MW) in
Finland (compared with emissions in 2000), comparison B (coal condensate power).

44

Table 3. The aggregate cumulative market potentials (MW), additional electricity and heat production
with these potentials (TWh), and CO2 emission reduction potentials (Mt) of all distributed energy production technologies in Finland (compared with 2000).
Cumulative market potential(compared with 2000), MWElectric power

Thermal power

2005

2010

2020

2005

2010

2020

Scenario 1 (business as usual)

100

300

700

200

500

900

Scenario 2 (moderate growth)

300

900

2900

500

1200

3100

Scenario 3 (strong growth)

800

1600

4500

1100

2300

5100

Additional energy production(compared with 2000 ), TWh

Electricity

Heat

2005

2010

2020

2005

2010

2020

Scenario 1

0.4

1.0

2.4

0.7

1.5

2.9

Scenario 2

1.3

3.1

9.1

1.6

3.5

9.2

Scenario 3

2.7

5.5

14.5

3.4

6.8

15.0

CO2 emissions (Mt) reduction potential(compared with 2000)

Comparison A

Comparison B

2005

2010

2020

2005

2010

2020

Scenario 1

0.2

0.5

1.0

0.6

1.2

2.9

Scenario 2

0.6

1.2

3.2

1.6

3.8

10.6

Scenario 3

1.1

2.3

5.4

3.5

7.0

(17.1)

Comparison A: distributed electricity production is assumed to replace average electricity production.
Comparison B: distributed electricity production is assumed to replace coal condensate power.
Note that there will not necessarily be enough coal condensate power in 2020 to be replaced in scenario 3.

5 Conclusions
Distributed energy production is a fast-growing
sector of energy technology. In Finland, the mostcompetitive technologies at the moment are biomass boilers, hydro and wind power, and gas anddiesel engines. The growth of these technologies ismainly restricted by water conservation, land use
legislation, and the price and availability of the fu-

els (natural gas and biomass). The most potential
Finnish export technologies are wind power components, biomass fuels and combustion technologies, and gas engines. With a moderate growth of
distributed energy production, the Finnish CO2emissions can be reduced by 1.2–3.8 Mt by 2010.
However, this requires that the Finnish Action Plan
for Renewable Energy Sources with the related
support actions will be completed.

45

Publications and reports made under
the project
Vartiainen, E., Luoma, P., Hiltunen, J., Vanhanen, J.
2002. Hajautettu energiantuotanto: teknologia,
polttoaineet, markkinat ja CO2-päästöt. [Distributed Energy Production: Technology, fuels, markets
and CO2 emissions. (In Finnish)]. Gaia Group Plc.
Edita Plc, Helsinki 2002.

References
EC 1997. Energy for the Future: Renewable Sources ofEnergy. White paper for a Community Strategy andAction Plan. European Commission, Bruxelles,
Belgium. http://europa.eu.int/comm/energy/library/
599fi_en.htm

46

Helynen, S., Holttinen, H., Lund, P., Sipilä, K., Wolff, J.
and Alakangas, E. 1999. Uusiutuvien energialähteiden edistämisohjelman taustaraportti. [Background
Report for the Action Plan for Renewable Energy
Sources. (In Finnish, with English abstract)].
Ministry of Trade and Industry, Finland. Helsinki.
112 p. Studies and Reports 24/1999. ISBN 951739-521-3.
IEA 2000. World Energy Outlook. Highlights. OECD/
IEA, 2000. 92 p.
Statistics Finland 2001. Energiatilastot. [Energy Statistics 2000. (In Finnish, Swedish, and English)]. Statistics Finland, Helsinki. 150 p. Energy 2001:2.
ISBN 951-727-960-4.

Future Possibilities of Hydrogen Technologies
Vetyteknologian kartoitus

Tero Hottinen, Klaus Mäki-Petäys, Peter Lund
Helsinki University of Technology,
Espoo, Finland
Teknillinen korkeakoulu, Espoo

approximately 50 000 MW of fuel cells, which isover 1 000 times EU’s fuel cell capacity estimatedin 2010. The price of fuel cells would have to fall to
one twentieth of the present price in order to enable
such large-scale use. This could be possible somewhere between 2025–2030.

Abstract
The importance of hydrogen technologies were
evaluated in the Tekes project “Road-Map for Hydrogen Technologies”. The project has taken boththe international and national development into account in order to find the most promising fields ofhydrogen technologies for Finland
The use of hydrogen in the energy economy is quite
low. Over 90% of the hydrogen consumption in theworld is from the chemical industry. The hydrogenconsumption is equivalent to about 100 Mtoe/a orslightly over 1% of the world’s total energy consumption. The corresponding figure in Finland isabout 2%. The main producers and users of hydrogen in Finland are Fortum Oyj and Kemira Oyj.
In an industrial sense, the hydrogen is a basic raw
material for process and chemical industries andthe related technology is well known. The main
motive to the energy use of hydrogen is the connection to efficient end-use technologies, which enables better performance and smaller emissions.
The fuel cells have been found to be the most interesting new hydrogen technology. The importanceof peripheral technologies, such as hydrogen storage and small-scale H2 production, is growing withthe use of fuel cells. The market penetration of fuelcells requires great technological and financial efforts.
In order to be able to tailor together the schedule ofmarket penetration and the critical factors of hydrogen energy in Finland, a few hydrogen scenarios were made. For example, the use of 1 Mtoe/a(3% from the whole primary energy) of hydrogenenergy in the transportation sector would demand

The scenarios brought up some critical peripheraltechnologies. Small-scale gasification and processing of solid biomass, hydrogen storage, small
on-board stores, and pressurized electrolysis equipment are some of the most interesting technologies.
Tiivistelmä
Tekesin ClimTech-ohjelman projektissa ”vetyteknologian kartoitus” on arvioitu vetyteknologian
merkitystä keskipitkällä aikatähtäimellä. Selvityksessä on paikannettu alan kehityskohteita ja Suomelle kiinnostavia osa-alueita niin kansainvälisenkehityksen valossa kuin myös kotimaiset lähtökohdat huomioon ottaen.
Vedyn käyttö energiataloudessa on hyvin vähäistä.
Yli 90 % kaikesta vedystä maailmassa käytetään
kemian teollisuudessa. Energiaksi muutettuna vedyn käyttö vastaa noin 100 Mtoe/v tai runsas 1 %koko maailman energian kulutuksesta. Suomessa
käytetty vety vastaa noin 2 % koko maan energiantuotannosta. Suomessa vedyn suurtuottajia ja-käyttäjiä ovat olleet Fortum Oy ja Kemira Oy.
Teollisessa mielessä vety on prosessi- ja kemianteollisuuden perusraaka-aine ja tähän liittyvä tekniikka on hyvin tunnettua. Pääasiallinen motiivi
vedyn energiankäytölle löytyy sen yhdistämisestä
tehokkaaseen loppukäyttöteknologiaan, jolloinsaadaan parempi ominaissuoritetaso ja pienemmät
päästöt. Esimerkiksi maakaasusta valmistettu H2polttokennoautossa pienentää kasvihuonekaasupäästöjä 60–80 % bensiinikäyttöiseen autoon verrattuna. Selvityksessä onkin paikannettu poltto47

kennot tärkeimmäksi uudeksi vetyteknologian alueeksi, jonka pääasialliset markkinasegmentit ovat
liikenne, stationaariset pienvoimalat sekä kannettavat sovellukset. Polttokennojen kautta oheisteknologioiden, kuten vedyn varastoinnin ja pientuotannon, merkitys kasvavat. Polttokennojen
kaupallistaminen ja saaminen markkinoille edellyttävät suuria kehitys- ja teknologiapanoksia.
Selvityksessä laadittiin muutamia vetyskenaarioita, joiden avulla pyrittiin hahmottamaan vetyenergian markkinoilletulon aikataulua Suomessa,
mutta myös kriittiset pullonkaulateknologiat. Esimerkiksi 1 Mtoe/v vetyenergian käyttö liikenteessä
polttokennoautoissa (3 % koko primäärienergiasta)
edellyttäisi noin 50 000 MW:n verran polttokennoja, joka on yli tuhatkertainen EU:n arvioituun polttokennokapasiteettiin verrattuna vuonna 2010.
Polttokennon hinnan tulisi pudota kahdeskymmenesosaan nykyisestä, jotta laaja käyttö olisi mahdollista. Tämä voisi toteutua arviolta 2025– 2030.
Skenaarioanalyysit nostavat esille eräitä kriittisiä
oheisteknologioita. Pienen mittakaavan kiinteänbiomassan kaasutus ja prosessointi, vedyn varastointi, pienet on-board-tyyppiset varastot ja näihin
liitettävät pienemmät paineistetut elektrolyysilaitteistot ovat kiinnostavia kehityskohteita.

1 Introduction
Hydrogen is a clean fuel whose energy density is
33 kWh/kg or 3 kWh/m3. Conversion of hydrogen
into end-use energy (electricity, heat) produces
mainly water vapor (H2O). The production of hydrogen may produce some carbon dioxide.
Hydrogen is an energy carrier, not an energy
source. It can be produced from primary energy
sources and hydrocarbons (CnHm). Usually hydrogen is produced by steam reforming of natural gas(CH4+2H2O→ 4H2+CO2), or in smaller amounts
by electrolysis of water (2H2O+electiricity→
2H2+O2).
Over 90% of the world’s hydrogen is consumed in
the production of fertilizers and by the petrochemical industry (e.g. in cracking). Other industrial
48

uses of hydrogen are for example in production offats and semiconductors. The major energy use ofhydrogen is its use as a rocket propellant. The total
consumption of hydrogen is equivalent to about
100 Mtoe/a or slightly over 1% of the world’s totalenergy consumption. The price and markets of H2
are largely dependent on its need in industrial processes and on the raw material used in the production. The H2 consumption in Finland is equivalentof about 2% of the whole energy consumption in
the country.
The use of H2 energy is always more expensive
than the primary energy itself. The H2 energy produced from natural gas is 2–3 times more expensive than natural gas, and H2 energy produced bygasification of biomass is 4–5 times more expensive than the biomass itself. H2 made by electrolysis is 2–4 times more expensive than electricity.
The main motive to the energy use of H2 is the connection to efficient end-use technologies. The
emission problems of transportation and the development of H2-using fuel cells enhance the interest
towards H2. For example, the use of H2 that is reformed from natural gas in a fuel cell car diminishes the emissions of greenhouse gases 60–80%
compared to a gasoline-fueled car.
In an industrial sense, the H2 is basic raw material
in process and chemical industries, and the related
technology is well known. Fuel cell technology is
the most interesting new H2 technology. The importance of peripheral technologies, such as H2
storage and small-scale production, is growing
with the use of fuel cells. The market penetration offuel cells requires great technological and financial
efforts.
Some long-term energy scenarios view H2 as the basis of a sustainable energy development in 2050–
2100. It is estimated that on a medium-term timescale the H2 production potential is about 6 TWhth/ain the Nordic Countries. On a very long-term timescale, this potential will rise to over 200 TWhth/a,and main energy sources would be natural gas andrenewable energy sources.

2 Storage of Hydrogen
2.1 Hydrogen Storage Technologies
Hydrogen is a difficult element to store because it
is a small molecule gas. Even though hydrogen has
a very good gravimetric energy density, its gaseous
form causes that even a small amount of it needs alarge volume or a very large pressure. For transportation application hydrogen also needs a proper
distribution infrastructure.
The present state and future potential of hydrogenstorage technologies were evaluated within the
project (Hottinen 2001). The hydrogen storage capacities of different storage technologies are given
in Table 1 below. Also, the possible application areas of different technologies are given (transp =transportation, CHP = combined heat and power
production, port = portable electronics).
Only a few of storage technologies are suitable forreal applications. Gaseous hydrogen is suitable forlarge and medium-scale applications, in which it iseasy and safe to use elevated pressures. Gaseoushydrogen is probably not suitable for portable electronics, since it would demand large pressure regulators and causes a possible safety risk. The use of
new composite containers is more expensive than
the traditional steel and aluminum bottles, but theenergy density is much higher. A composite container storage costs about 7 €/kWh (the cost of storage per storing capacity).
Because of the large volume needed, the gaseoushydrogen containers are suitable for applications
in which the need of energy is at maximum about
500 kg of H2, i.e. approximately 4 GWh (200 bar).
Hydrogen can also be stored in subsurface caves
and caverns. This kind of cave can have even a volume of 100 000 m3 and a pressure of hydrogen
about 100 bar, so a subsurface cave may be able tostore as much as 30 GWh of energy. One of themain problems of subsurface storage methods isthe leakage loss. This kind of cave storage has notbeen implemented in practice yet.
The liquefaction of hydrogen consumes lots of energy (about one third of hydrogen energy content),
and is thus quite expensive storage method to use.
This is why it is most suitable for applications inwhich the size and mass of the storage is critical andthe cost is not. The cost of liquid hydrogen storage isabout 7 €/kWh, which is increased with usuallyquite large boil-off losses. Liquid hydrogen ismainly used as rocket propellant storage method(NASA). The biggest separate liquid hydrogentanks can be about 4 000 m3 in size (appr. 10 GWh).
Some fuel cell car developers have designed a liq-

Table 1. The storage capacities of different hydrogen storage technologies.
Storage method

Hydrogen capacity

Energy capacity

Applications

Gaseous H2

11.3 m-%5.0 kWh/kg

transp, CHP

Liquid H2

25.9 m-%13.8 kWh/kg

transp

Metal hybride~2–5.5 m-%

0.8–2.3 kWh/kg

port, transp

Activated carbon

5.2 m-%

2.2 kWh/kg–

Zeolites

0.8 m-%

0.3 kWh/kg–

Glass spheres

6 m-%

2.5 kWh/kg–

Nanotubes

4.2–7 m-%1.7–3.0 kWh/kg

port, transp

Fullerens~6 m-%

2.5 kWh/kg

port, transp

Chemical

8.9–15.1 m-%

3.8–7.0 kWh/kg

all

49

uid hydrogen tank into their fuel cell car (BMW,
Mercedes-Benz). The size of liquid hydrogen tankin transportation applications is in the scale of 120 l(appr. 300 kWh).
Metal hydrides have quite a poor storage capacity
compared to gaseous and liquid hydrogen. However, the metal hydrides are quite small. At best
they can store even more energy in the same volume than liquid hydrogen. Excellent pressure-temperature properties for practical applications canbe achieved with proper kinds of metal hydrides,
enabling the use of small pressure regulators. Because of these properties, the metal hydrides are
suitable only for small and medium-scale applications, such as portable electronics and possiblytransportation. The cost of metal hydride storage isdozens of €/kWh because of several difficult manufacturing phases.

Table 2. Energy densities of some typical synthetic fuels.
Fuel

Gasoline
Gaseous H2
Liquid H2
Methanol
Ethanol
Natural gas
Ammonia

Energy density
3

kJ/kg

MJ/m

43000
120000120000
20000
27000
46000
17000

37000
10
8700
16000
21000
33
13

age capacities with nanotubes have been achievedin laboratory conditions. Real nanotube storage
has not been demonstrated yet, and thus they havelots of open questions to be solved. The price of
nanotubes is still tremendously high (appr. 100 €/g
corresponding almost 60 000 €/kWh).
Hydrogen can also be stored indirectly in the formof synthetic fuels. Energy densities of some typicalsynthetic fuels have been gathered in Table 2.
2.2 International and National Actors

Figure 1. 20 l of hydrogen storing metal hydride
container and a normal D-type battery.

An example of a small metal hydride container isillustrated in Figure 1. The container can store 20 Nlof hydrogen corresponding the energy content of
about 78 Wh. A normal D-type battery (1.5 Wh) is
also in the figure for size comparison.
The nanostructures of carbon, especially nanotubes, are maybe the most promising hydrogenstorage method of the future. Good hydrogen stor-

50

The research of hydrogen storage technologies is
nowadays mainly concentrated on manufacturing
techniques and material development. New composite containers for gaseous hydrogen storage
have been researched and developed mainly by
Quantum Technologies, Inc. from Canada. The
biggest names in the field of liquid hydrogen storage are e.g. Linde AG and L’Air Liquide.
The metal hydride research around the world isconcentrated on finding metal compounds that areeasier to manufacture and have better hydrogenstorage properties. One of the biggest international
manufacturers of metal hydrides is Gfe mbH from
Germany. Hydrogen storage in carbon nanostructures is being actively studied in several research institutes around the world.

The basic know-how in the field of chemical compounds is on solid ground especially in the chemical industry. The storage of chemical compounds iswell known, and is thus not a challenge. The main
problems are the fuel processing for the end-user
and possible influences on health.
There is a lot of domestic know-how in the field ofsynthetic fuels. The gasification of biomass and the
production of synthetic fuels from biomass (suchas peat) are actively studied. One of the largest actors in the field is Kemira Oy, which has experience
over a long time especially in the manufacturing ofammonia.
The compounds needed in metal hydrides are manufactured by Outokumpu Oy. The research in thefield is mainly carried out at HUT and VTT. HUT
has concentrated mainly on the properties of low
temperature and pressure metal hydrides, and VTT
mainly on metal hydride applications.

3 Fuel Cells
3.1 Fuel Cell Technologies
Fuel cells are electrochemical devices that convert
the chemical energy of hydrogen directly into electricity and heat with water being the only reaction
product. Fuel cell reaction is purely electrochemical, and thus there is no burning with flame as in internal combustion devices. The main fuel cell reaction is (e.g. in PEM fuel cell):1
H2 + O2 → H2O + electricity + heat.
2

The operation principle of fuel cell is illustrated in
Figure 2.
In small power scale fuel cells may replace battery
technology in portable electronics. In medium
power scale fuel cells can operate as power supply
for vehicles instead of combustion engines or e.g.
in small-scale combined heat and power production (µCHP). The large-scale applications are in
power production.

Figure 2. Operation principle of PEM fuel cell (image: Plug Power)

51

Some properties of different types of fuel cells andfuture potential (– no potential, + some potential,++ very good potential) are summarized in Table 3.

Table 3. Properties of different types of fuel cells.
Type of fuel cell

PEMFC

AFC

PAFC

MCFC

SOFC

electrolyte

polymer
membranealkaline

phosphoricacid

moltencarbonate

ceramic
zirconiumoxidetemperature

40–90 oC

65–200 C

170–200 C

600–800 C

600–1100 C

fuel

H2

H2

H2

H2, reformingof hydrocarbons

H2, reformingof hydrocarbons

el. efficiency

35–40%

40–50%

40–50%

50–60%

45–55%

power scale< 1W–500 kW

10–100 kW< 10 MW< 100 MW< 100 MWapplications

port., trans.,µCHP

transportation,
µHCP

CHP

CHP

CHP

future potential

++

−

−

+

++

o

3.2 International Interest in Fuel Cells
There are great efforts on the development andmarketing of fuel cells throughout the world, especially in automotive industry. Almost all of the car
manufacturers are developing a PEM fuel cell carof their own. For example, Toyota and DaimlerChrysler have announced that they will bring theirfuel cell cars to market within two years.
In CHP-applications ALSTOM’s 200 kW PEMFC
plant, FCE-MTU’s MCFC plant, and SiemensWestinghouse’s SOFC plant are on their way tomarket. IFC-ONSI’s PAFC plant has already beenon the market for a while. Siemens- Westinghouseis also bringing to market a combi plant in which agas turbine is attached to a SOFC. Several energy
companies have shown interest in fuel cell power
production.
The suggested less than 10 kW µCHP residential
applications are mainly based on PEMFC (Vaillant,
H-Power), but SOFC-based solutions are also be52

o

o

o

ing developed (Sulzer-Hexis). Solutions for othermedium-scale applications, such as weather andlink stations, are also on the market (NAPS,
H-Power). The manufacturers of small-scale battery-using equipment, such as portable computers
and mobile phones, are also active on developing
fuel cells (Motorola, Nokia, ZSW, Casio).
3.3 Research and Interest on
Fuel Cells in Finland
Fuel cells are studied in Finland at Universities(TKK, HY, ÅA) and Technical Research Centre of
Finland (VTT), and also in some companies. Research is mainly concentrated on structural andmaterial solutions, and on system development.
NAPS Systems Oy has the only commerciallyavailable fuel cell based energy system product. In
the system, the excess solar energy is used to produce hydrogen and when the solar energy is notenough to cover the need of the load, the fuel cell isused as a backup power system. Hydrocell Oy produces AFCs for small applications.

Wärtsilä Oy is going to develop a solid oxide fuelcell system, but most of the Finnish companies(NAPS, Tamrock, and some others) are more interested in developing their product on imported
PEMFCs. Kemira produces catalysts that are usedin the autoreforming of high-temperature fuelcells. Some interest has also been shown in the fuelcell structure related matters (Optatech). The Finnish fuel cell research is on very initial stage in international comparison.

4 Other Hydrogen Technologies
4.1 Hydrogen Production
The main part of hydrogen production is devoted toammonia production in the fertilizer industry, andto crude oil cracking and desulphurization at oil refineries. There are also numerous other uses, including the production of industrial chemicals, applications in metal and electronics industries, andmargarine hydration in food industry.
The principal production method of hydrogen is
steam reforming, in which up to 89% of the energy
content of natural gas is converted to the energy

content of hydrogen. The amount of carbon dioxide released is proportional to the consumption ofnatural gas. The carbon dioxide emission resulting
from natural gas production affects the figures significantly. According to an US study, only 64% of
the energy content of a natural gas deposit can beconverted to the energy of hydrogen, and this figure does not contain the conversion of released
methane to equivalent carbon dioxide.
Water electrolysis in an alternative H2 production
method, but it currently accounts only for 1–4% of
all H2 production. Mainly in the production of hydrogen for special purposes, electrolysis is significantly used. Estimated hydrogen prices for different production methods and raw materials are presented in Table 4.
4.2 International Outlook on Hydrogen
Technologies
The global hydrogen consumption is 390 000 Mm3
per year, which equals to 100 Mtoe of energy. The
world primary energy consumption is approx.
9 000 Mtoe, which means that the current hydrogen production could cover slightly more than one

Table 4. Hydrogen production prices (Koljonen et al. 2001, Gaudernack et al. 1994).
Size pf prod. site
Mm3 (n)/d MW

Raw material

Hydrogen price€/GJ

Steam reforming
0.27
6.75
25.4

natural gas (3 €/GJ)
natural gas (3 €/GJ)
natural gas (3 €/GJ)

11.2
5.4
6.0

Gasification
6.78
2.80
2.26

coal (1,5 €/GJ)
waste oil (1,4 €/GJ)
biomass (46,3 €/GJ, dry wood)

9.9
9.8
10

Electrolysis
0.247
6.75
0.63

water (windpower)
water (0,049 €/kWh, electricity)water (0,0252 €/kWh, electricity)

20
25
17

53

percent of global energy requirements. However,
the hydrogen production is mainly consumed in industrial processes, and the only significant energy
use of hydrogen is currently as rocket fuel.
Hydrogen production from natural gas and the
dumping of carbon dioxide into the gas field has
been studied in Norway (Kvarner, Norsk Hydro).
A fuel cell bus has been test driven in Oslo alreadyin 1999 (Stor-Oslo Lokaltrafikk). In Iceland, large
expansions of electrolytic hydrogen production
capacity have been proposed, taking advantage ofthe availability of cheap hydro power. This could
eventually lead to transition to a full hydrogen
economy. In Denmark, Haldor/Topsoe is a leaderof fuel processing.

4.3 Finnish Outlook on Hydrogen
Technologies
The largest user of hydrogen in Finland is Fortum
Oyj, with oil refineries in Porvoo and Naantali. The
hydrogen consumption of Kemira in fertilizer production is not known. Small amounts for special
applications are produced by Woikoski Oy andAga Oy. Significant quantities of hydrogen are produced by Finnish Chemicals, as a by-product ofchlorate production for the paper industry.
The main hydrogen production sites in Finland arelisted in Table 5 and 6. Hydrogen has been produced in Finland by peat gasification (Kemira).
Small electrolyzers are developed and produced by

Table 5. Hydrogen production sites in Finland in 1996 (Zittel 1997).
Production site

Amount Mm3/aFinnish Peroxides Oy, Voikkaa

18

Kymmene Corporation, Kuusankoski
Neste Oy, Porvoo

Production
methodsteam reforming
steam reforming

150
300

steam reforming
as a by-productFinnish Chemicals, Oy, Joutseno

chlorine electrolysis

Finnish Chemicals, Oy, Kuusankoski

chlorine electrolysis

Veitsiluoto Oy, Forest Chemical Industry, Oulu

chlorine electrolysis

Nokia, Äetsä

chlorine electrolysis

Nokia, Joutseno

chlorine electrolysis

Oulu Oy, Oulu

chlorine electrolysis

Outokumpu Harjavalta Metals Oy
Espoo, electronic companies etc.

16

steam reforming
small H2 generators

Table 6. Estimates on hydrogen production in 2002.
Producer
Fortum, Porvoo

1000

Fortum, Naantali

200

Aga Oy22

Woikoski Oy
Finnish Chemicals

54

Amount Mm3/a

not available
120

LabGas Instrument Co. Metallic materials for hydrogen storage (metal hydrides) are produced(Outokumpu). Research on catalysts for fuel processing for fuel cells is done (Kemira Metalkat).

5 Scenarios
Hydrogen consumption in Finland equals to about
2% of total primary energy consumption. The hydrogen is mostly used in industrial processes. A
large part of the total production is derived as aby-product of industrial processes. H2 offers promising opportunities for the reduction of carbon dioxide emissions in transportation.
The efficiency of energy production is improved
by up to a factor of three by transition from internal
combustion engines to fuel cells. The total reduction of emissions is dependent on the hydrogenproduction method and the production efficiency.
When hydrogen or methanol produced from fossil
raw materials, or gasoline, is used as fuel in fuelcells in transportation, the improvement from thepresent situation is small, compared to completelycarbon dioxide free raw materials.

The share of transportation in the total energy consumption in Finland is 17%, and the consumption
consists currently mainly of oil (5 Mtoe). The useof bioenergy is 6.6 Mtoe, which is mainly due tothe wood processing industry. The consumption ofnatural gas in Finland is 3.8 Mtoe (4100 Mm3) per
year. The annual carbon dioxide emission is 54
millions of tons. The total CO2-emission from roadtraffic was 11 Gkg, from which 6 Gkg originatedfrom private vehicles.
In Finland, 47.7 billion car-kilometers are driven
each year. In Figure 3, the reductions of greenhouse gas emissions over the entire fuel chain arecompared in three different cases, if 18.3 milliards
of km (38%) are driven using alternative vehicles andfuels. The distance driven was chosen to correspondto 1 Mtoe of biomass. All of the vehicles are assumed
to be family cars of equal weight and power (1300 kg,
50 kW). The base case is a gasoline-powered vehicle
with consumption of 2.18 MJ/k m (n. 7 liters /100km), CO2 (equivalent) emissions 188 g/km, of
which 163 g/km during actual driving.
The sources used in the following are (Ohlström etal. 2001, Spath & Mann 2001, Koljonen et al. 2001,
Cuoco et al. 1995, Motiva). As for the emissions of

H2 via Biomass Gasification
H2

Biomassstorage dispenser
compressor

H2

NATURAL GASPIPELINE DELIVERY

H2 veh.

dispenser

COMP H2
GAS

dispenser

COMP H2GAS

NG
storage

COMP H2
GAS

compressor

H2 veh.

NG

Onsite electrolysis
ELECTRICITY

H2
storageelectrolyzer

compressor

H2 veh.

Figure 3. Fuel chains for three cases analysed. (mainly: Odgen et al. 1999)

55

natural gas production, a Finnish calculation
method was chosen.

reduction using electricity from nuclear or biomassenergy was thus 181 g/km, or 3.3 Gkg.

1) Biomass (wood chips)
It is assumed, that 1 Mtoe of biomass could be usedannually in the Finnish transportation system. This
amount of wood chips (52.26 millions of m3 solid)
equals to the current annual small-scale use in Finland, and it could be obtained from residuals ofthinning and end harvesting. The conversion ratio
from biomass to hydrogen is 60% (∆GNTP, dry H2).
The electricity needed for pressurization is produced on site from biomass, and this consumes
20% on the input energy. The annual hydrogenproduction is 170 000 tons (1900 Mm3).

Bottlenecks
The maximum allowable distance for biomasstransportation for gasification does not increase
with increasing plant size. The size of a gasification plant is limited by this, and by the fact that thefuel distribution network must match the geographic patterns of consumption. Small-scale gasification plants are still at a development stage.

The consumption of a hydrogen-powered fuel cell
car is assumed to be 1.1 MJ/km, and the CO2(equivalent) emission resulting from biomass collection etc. is assumed to be 3 g/km. The hydrogenproduction is sufficient for driving 18.3 milliardsof kilometers. The reduction of CO2 (equivalent)emissions compared to the base case is 185 g/km,
or 3.4 Gkg.
2) Natural gas
Natural gas-powered vehicles account for 183 milliards of km (Otto engine, 1.86 MJ/km, 109 g CO2/km, of which 94 g during actual driving). The electricity needed for gas compression (200 bar) is produced on site from natural gas (10% of energy).
The consumption of natural gas is 0.9 Mtoe (970
Mm3) and the CO2 (equivalent) emission reduction
is 79 g/km, or 1.4 Gkg.
3) Electrolysis
In this alternative, 18.3 milliards of kilometers are
driven using hydrogen-powered fuel cell cars (1.1
MJ/km), for which the hydrogen is produced fromwater using electrolysis. The efficiency of electrolysis is assumed to be 70% (LHV), and 10% of theconsumed electricity is needed for pressurization.
The electricity consumption equals to 8.9 TWh, orthe annual production of a 1100 MW power station. The CO2-emission from nuclear power was
assumed to be 15 g/kWh (7 g/km), mainly resulting
from fuel production. The CO2 emission for electricity produced from biomass was the same. The
average figures for electricity production in Finland are 250 g/kWh (121 g/km). The CO2-emission
56

A large hydrogen tank is needed with a continuously operating electrolysis or gasification plant,
whereas if the plant is connected to a natural gas
line, a pressurized storage is not needed. The problems of pressurized hydrogen in light vehicles are
not yet fully solved. High pressures are needed inorder to reach an acceptable storage density.
In order to achieve a commercial break-through ofhydrogen technologies, the development of fuelcell technology must proceed as anticipated. The
use of hydrogen in internal combustion engines
does not offer significant benefits compared to gasoline.
Comparison of alternatives and discussion
The planned driving distances (18.3 billions of kilometers) cover 45% of the Finnish light vehicle
fleet, when the average annual driving distance is
19000 km. Other vehicle types account for
15–20% of the kilometers. The combined output
power of the power sources of a million fuel cellcars is 50 000 MW. The serial production capacity
needed for this will not be reality in very near future.
The technology needed for the natural gas alternative exists. In addition, when research on pressurized hydrogen technologies proceeds, better compressors and pressurized tanks will be available foruse with natural gas also. The popularity of natural
gas indicates that widespread use of gaseous fuels
is a realistic vision. In Finland, the market penetration of natural gas vehicles is currently hindered by
the additional tax imposed on them.
In Finland, wood chips (10 GJ/ton) cost 2.4 €/GJ,
delivered to the power plant. If the allowed cost isincreased to 3€/GJ, the available resources areTable 7. Analyzed options compared to the use of gasoline.
∆E/km

∆CO2

∆€/km

FinlandTransportation

Biomass-H2

–2%

–6%

–31%

–13...+64%

Natural gas-CH4

–12%

–3%

–13%

–7%

Electrolysis-H2–22% (ηe = 100%)

–6%

–30%

+9...+90%

doubled (Ylitalo 2000, Hakkila et al. 1996). Raw
materials account for 10% of the cost of hydrogenproduced from biomass. The investment cost of theequipment is the main cost component.
The delivery and distribution costs of pressurizedhydrogen (20±10 €/GJ for H2, LHV) must be
added to the production cost (Padró & Putsche
1999, Cucco et al. 1995, Koljonen et al. 2001).
There is large variation in the estimated costs.
The energy consumption of hydrogen production(Table 7.) has been assumed from the carbon dioxide emissions (not equivalent) on diesel oil basis(74 g ⇔ 1 MJ). Nuclear electricity is counted as
primary energy. The comparison cost of gasoline
without tax at the service station is 12.5 €/GJ (0.4 €/liter). The cost of electricity for electrolysis is 7 €/GJ (0.0252 €/kWh). Natural gas costs at service
stations in Sweden 21 €/GJ, of which 7.4 €/GJ istax. (Fordonsgas, DESS 2000).

6 Conclusions
From a market perspective, the principal applications of hydrogen and related technologies are inchemical and process industries, where substantial
expertise of hydrogen production exists, especiallyfrom the point of view of hydrogen technologies.
Hydrogen has no position in the energy economy,
and on an energy basis, the production of hydrogenequals to slightly more than one percent of theFinnish and global energy use.
In this study, fuel cells have been identified as themost important new field of hydrogen technology.
The principal market segments are transportation,
small stationary power plants and CHP applica-

tions, and portable applications. Each of these includes significant peripheral technologies of hydrogen technology. The small applications probably represent a win-win -situation, whereas theothers still contain significant risks.
Some hydrogen scenarios for Finland were developed. The use of 1 Mtoe equivalent of biomass annually in transportation, using fuel cell cars, corresponds to 170 000 tons/y hydrogen. This would require 50 000 MW of fuel cell vehicles or more than
1 000 times the assumed fuel cell capacity of EU in
2010. In this study, it was estimated that the scenario could become reality approximately in
2025–2030. A key prerequisite for this is sufficientdevelopment and market introduction of fuel cells.
In practice, the cost of fuel cells should be decreased by a factor of 20 from the present level.
The scenarios highlighted a number of critical peripheral technologies. In biomass-based hydrogenproduction, small-scale gasification and processing of solid biomass is a central field of development. In electricity-based hydrogen production,hydrogen storage is an important topic. Because
large-scale storage of hydrogen may not be feasible, this emphasizes the importance of small onboard type storage methods, and small, pressurized
electrolyzers that could be connected to them.
The study indicates that hydrogen technology will
have an impact on energy economy in 25–30 years
at the earliest, and the investment needed in technology development and market introduction issignificant.
Before large-scale applications, smaller niche-typehydrogen applications will become more widespread. Portable fuel cell applications are probably
57

closest to this stage. The central technology fields
will then be the small fuel cell, hydrogen storage
and the auxiliary electronics. Another example isautonomous energy systems, in which the Finnish
NAPS is an international market leader. In nichemarkets, the introduction of hydrogen energy is not
driven by the price of hydrogen or energy.
Publications and reports made under
the project
Hottinen, T. 2001. Technical Review and Economic Aspects of Hydrogen Storage Technologies. Master’s
thesis, Helsinki University of Technology, 2001.
Mäki-Petäys, K. 2002. Kirjallisuustutkimus vetyenergiateknologian mahdollisuuksista hiilidioksidipäästöjen vähentämisessä. (In Finnish with English
abstract). Master’s thesis, Helsinki University ofTechnology, 2002.

References
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No. 12, pp. 1303–1309.
DESS 2000. Handel med energi samt priser, skatter och
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153–178, http://www.dess.nu/pdfs/bilaga_handel.pdf (Referred 20.7.2002).
Fordonsgas 2002. Bensinekvivalent. http://www.fordonsgas.se/ (Referred: 20.7.2002).
Gaudernack, B., Andreassen, K., Árnason, B., Lund, P.,
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Puuenergia ry – Träenergi rf, Metsäntutkimuslaitoksen tiedonantoja 613, Vantaa.
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Koljonen, T., Marjaniemi, M., Ohlström, M., Poteri, A.,
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