30 March 2023
Today's Top Nordic Green News:
- H2 Green Steel secures significant fossil-free electricity deliveries for new steel plant with multibillion-dollar agreement
- European energy ministers approve radical revisions to climate policies, including ban on ICE cars by 2035
- Europe investments in new wind the lowest since 2009
H2 Green Steel secures significant fossil-free electricity deliveries for new steel plant with multibillion-dollar agreement
Sweden's H2 Green Steel has signed a framework agreement with Finnish energy group Fortum to purchase multibillion-dollar fossil-free electricity, securing a significant portion of the electricity deliveries to the company’s new steel factory in Boden, Sweden. This comes after the company signed a major electricity contract with Norwegian power giant Statkraft last year, which requires Statkraft to sell 2 TWh annually between 2026-2032 and is also worth several billions. The agreements have been made with foreign state-controlled energy groups.
H2 Green Steel plans to produce steel with dramatically lower emissions of carbon dioxide than traditional steel production, using green hydrogen, which requires large amounts of fossil-free electricity. Fortum says the electricity will primarily come from its hydropower plants in northern Sweden. The company expects to need around 9.5 TWh of electricity per year, equivalent to around 6-7% of Sweden's total current electricity consumption, once fully developed.
The framework agreement with Fortum initially includes deliveries of up to a total of 2.3 TWh of electricity per year divided into two different sub-agreements. One to supply 1.3 TWh per year over five years starting in 2026, with the electricity price controlled by an index linked to the futures market. The other agreement, beginning in 2027, will see Fortum supply an additional 1 TWh of electricity at a fixed price for nine years. The financial details of the agreements have not been disclosed, but it is expected to be worth several billion, according to Luisa Orre, purchasing director at H2 Green Steel. Orre also added that, “it feels very good that despite the current energy crisis in Europe and the last year's record-high electricity prices, we were able to agree on terms that are long-term competitive and attractive for both parties".
European energy ministers approve radical revisions to climate policies, including ban on ICE cars by 2035
On March 28, 2023, the EU's energy ministers decided to ban the sale of new cars with an internal combustion engine (ICE) from 2035, with a vague promise to allow the sale of ICE cars that can only run on electro-fuels after 2035. The Effort Sharing Regulation (ESR) and the LULUCF regulation were also revised to reduce emissions by a quarter and increase the net storage of coal within the Union by 15 percent, resulting in a 500-600 million tonne reduction in annual net emissions of greenhouse gases between 2021 and 2030.
Sweden will have to halve its emissions from traffic by 2030, requiring a reduction of 7-8 million tonnes. They also have the opportunity to increase their annual ESR space by almost 900,000 tonnes. However, this will reduce the state's revenue from emissions trading by approximately SEK 1 billion annually.
The LULUCF regulation requires Sweden to increase the net storage of carbon in their landscape and wood products by 10% by 2030. However, the Swedish government's view of the regulation is unclear, with the government expressing both praise and criticism. The Swedish government has criticised the EU's approach to assessing the storage of carbon, and expressed concern about the impact of the regulation on the country's agriculture. Sweden has been urged to limit the extraction of timber from its forests and reduce the withdrawal of biomass to ensure it meets the 2030 target.
If Sweden fails to meet the requirement, it can transfer "overachievements" under the ESR to the LULUCF sector, or buy LULUCF space from Member States that have exceeded their condition.
Provisional agreement reached on EU Renewable Energy Directive, including increased 2030 target
The negotiators of the European Council and the EU Parliament have reached a provisional agreement on renewable energy. "We reached an ambitious compromise," writes Kadri Simson, EU Commissioner for Energy Affairs, on Twitter.
The negotiations on the EU's Renewable Energy Directive (RED for short) have touched on several heavy issues, including nuclear power, where a number of countries, led by France, pushed for hydrogen produced by nuclear power to be counted as renewable. The discussions have also been about raising the EU's target for the share of renewable energy in 2030 - from 32% to at least 40% - and about the view on different biofuels. In addition, RED is also expected to be important for the reduction obligation in Sweden and for Swedish district heating.
Europe investments in new wind the lowest since 2009
Europe invested just €17 bln in new windfarms in 2022 - down from €41 bln in 2021 and marking the lowest investment figure since 2009. The EU wants to accelerate the build-out of wind energy to strengthen its energy security and ensure affordable electricity prices, but recent market interventions and remaining barriers are said to be deterring investors. According to WindEurope, Europe urgently needs to restore investor confidence, otherwise it might see a drop in new windfarms instead of the big increase envisaged in REPowerEU. WindEurope’s Annual Financing and Investment Trends report finds Germany invested the most in new windfarms in 2022, followed by Finland and Poland. The €17 bln financed windfarms with a total capacity of 12 GW in all of Europe, 10 GW of which were in the EU.
Car battery market gears up for future boom
More battery manufacturers have expressed interest in recycling graphite used in the production of lithium batteries on the back of rising raw materials costs and shortages. Ken Nagayama, head of business development of battery materials at Aurubis, believes there will be “sufficient market supply to develop a battery recycling plant in industrial scale during the second half of the decade.” Among the actors spearheading the boom is Swedish and Norwegian joint venture Northvolt-Hydro, which aims to recycle the equivalent of 500,000 batteries by 2030. This would represent around half of the batteries likely to be available for recycling by that time.
Niam Infra Fund acquires majority stake in Bright Sunday, offering solar energy as a service to commercial and industrial customers
Sweden’s Niam Infra Fund has acquired a majority stake in Swedish company Bright Sunday, which provides solar energy as a service to commercial and industrial customers without investment cost. The company currently has a portfolio of 65 solar projects with a total installed power of about 20 MW in Spain and Portugal, and Niam plans to invest in the company to expand its presence in several European markets. The goal is to build a portfolio with Niam worth EUR 100 million in the coming years.
Hitachi Energy and Petrofac to supply wind power integration technology and infrastructure for European grids
Hitachi Energy and Petrofac have won a multi-year framework agreement with Dutch-German grid operator TenneT to supply multiple offshore and onshore high voltage direct current (HVDC) converter stations and associated infrastructure to integrate bulk renewable energy into European grids. The companies will install six renewable energy integration systems, each with a capacity of 2 GW and a voltage level of 525 kV, which are world firsts for offshore wind power. The framework agreement is the largest ever for Hitachi Energy.
Two large-scale solar projects in Sweden handed over to Nordic Solar A/S for construction
Swedish Helios Nordic Energy AB has handed over two large-scale solar cell projects to Danish solar energy firm Nordic Solar A/S. The two solar projects have a combined production capacity of 113 GWh, making them among the largest announced solar projects in Sweden. The projects are built and financed entirely on market terms without government subsidies, and are expected to be in operation by the end of 2025. The projects will also improve the local natural environment, with several measures planned to increase biodiversity and support local flora and fauna. Nordic Solar plans to construct the two solar parks in southern Sweden, contributing to the increasing production capacity of sustainable solar energy in the area.
Semper and Lantmännen partner to drive sustainable farming practices in Sweden
Swedish companies Semper and Lantmännen have partnered to create a more sustainable farming of oats, wheat and rye in Sweden. They are joining forces in Lantmännen's Klimat & Natur program for sustainable farming. Semper, which makes food for babies and toddlers, will adopt farming methods such as the use of fossil-free mineral fertilisers, fossil-free fuels and precision farming, among others, to reduce the impact of climate change, and foster biological diversity. Through Klimat & Natur, Lantmännen guarantees demand for the harvest, while farmers are compensated for their efforts in introducing sustainable practices on their land.
Norway announces first tenders for project areas for offshore wind
The Norwegian Ministry of Petroleum and Energy has launched a competition for renewable energy production on the Norwegian continental shelf. The Ministry has announced two areas, Southern North Sea II and Utsira Nord, for tender. The government's ambition is to allocate areas for 30,000 MW from offshore wind by 2040. The application deadline for Sørlige Nordsjø II is 4 August 2023 and for Utsira Nord, it is 1 September 2023. The production of renewable power at Utsira Nord will be awarded to three players through a competition based on qualitative criteria.
Norway to invest NOK 56 million in renewable energy projects in developing countries
Norway will invest NOK 56 million for the Mirova Sunfunder's Gigaton Empowerment Fund to finance renewable energy projects in Africa, Asia and the Pacific. Sweden will also invest, and is providing a The fund will provide loans to small and medium-sized businesses investing in decentralised solar energy for households and businesses in low-income countries. The main focus of the fund will be in Africa south of the Sahara, with the expected results of providing energy access to at least 2.3 million people, 500,000 jobs and avoiding at least 3.8 million tonnes of CO2 emissions.
Fortescue Future Industries and Statkraft sign power purchase agreement for green energy project in Norway
Fortescue Future Industries (FFI) and Statkraft have signed a long-term power purchase agreement to supply renewable energy for FFI's planned green energy project at Holmaneset in Norway. The project, which is currently undergoing a feasibility study, is aimed at producing green hydrogen and green ammonia, which are two key solutions needed to decarbonise society and achieve net zero emissions. The agreement is conditional on a positive final investment decision for the project. FFI is a global green energy company committed to producing green hydrogen from 100% renewable sources, while Statkraft is Europe's largest producer of renewable power.
Eurowind Energy and Evida partner to develop hydrogen infrastructure in North Jutland, Denmark
Eurowind Energy and Evida have signed a Memorandum of Understanding to investigate the possibility of developing hydrogen infrastructure between a future hydrogen storage in Lille Torup and Eurowind Energy's energy parks at Hejring, Handest and Overgaard in Denmark. Together, the companies will identify needs and opportunities for the establishment of piped infrastructure for the transport of hydrogen
Niras reports 3.5 billion in revenue in 2022 and looks to increase investments in green energy solutions
Niras, a Danish engineering company, reported a revenue increase of DKK 3.5 billion in 2022, up from DKK 2.9 billion in 2021, with a growth of 10% driven by organic growth of 8.5% and acquisitions. The company's CEO attributed the success to the trust of customers, resulting in many new projects and a large order book. Despite a decrease in after-tax profit, Niras plans to invest DKK 150 million over several years to develop green energy solutions. The company also won important studies of Denmark's overall sustainable wind energy potential and was chosen as an environmental advisor for the Swedish Armed Forces. Despite uncertainty in the security policy situation and global economic development, the company looks to continue profitable growth and development in 2023.
What we’re reading
- UK’s top asset manager warns of ‘bumpy ride’ through green transition (Financial Times)
- UK and EU boost cooperation over new carbon border tax (Financial Times)
- 28 March 2023 – a day of celebration for European climate policy (blog)
About Nordic Green News
The Nordic countries are some of the most dynamic and successful economies in the world. They are also leaders in sustainability, from renewable energy, biofuels, carbon capture and storage and the hydrogen economy, circular economy business models and battery development, the Nordics are pioneers in policy design, technology development and consumer uptake. Mundus Nordic Green News is covering this transition for the international community. Every day we curate the stories of most relevance to international businesspeople and policy experts from the flow of news. Mundus Nordic Green Indices summarise the meta-data from our daily coverage to enable easy tracking of trends. We supplement these with our own opinion pieces and commentary.
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