Lahti Energia and Nordic Ren-Gas have signed a cooperation agreement – Planning starts for the Finnish largest hydrogen and P2X-fuel investment
The agreement concerns the technical and economic feasibility study of the Power-to-Gas plant complex for the Kymijärvi power plant area in Lahti. The study aims to confirm the technical and commercial feasibility of the project before the final investment decision is made. The cooperation agreement now concluded is a continuation of the preliminary study of the project carried out by the parties in the autumn of 2021.
The Power-to-Gas facility project will be implemented in stages. In its final size, the plant’s electrolysis capacity will reach 120 megawatts which translates into an annual fuel production capacity of approximately 50 million litre equivalent of renewable gas fuel for the heavy transportation sector. This amount corresponds to almost four per cent of the fuel consumption in heavy transportation in Finland. The total value of the investment is approximately EUR 250 million.
The parties are jointly responsible for the overall project development work. The work around the feasibility study is led by the project development company Nordic Ren – Gas Oy. The company’s main business is the development and ownership of Power-to-Gas production facilities and the sale and distribution of renewable transportation fuels.
For Lahti Energia, the planned facility enables a significant reuse of waste heat in the district heating network as well as utilization of carbon-dioxide free district heat. The company provides the site for the Power – to Gas facility and the infrastructure connection points necessary for procurement of process goods. From a project feasibility point of view the Kymijärvi industrial area is an ideal location for this type of project which intends to capitalize on the benefits of sector integration and proximity of key logistics routes.
– Ren-Gas aims to develop, finance and construct a decentralized production and distribution network for clean gas fuels in Finland for the use of heavy road transport. Lahti Energia’s competent team and the company’s commitment to achieving carbon neutrality have made our cooperation seamless. We are very excited to proceed with the feasibility study in close cooperation with Lahti Energia. The Kymijärvi area offers very promising opportunities for the production and distribution of renewable gas fuel and the utilization of waste heat, which makes Lahti an interesting logistics center for Ren-Gas’ fuel production, says Saara Kujala, CEO of Nordic Ren-Gas Oy.
Lahti Energia’s carbon handprint will be carbon negative
The signed cooperation agreement aims to establish a long-term cooperation for the development of clean energy solutions in Lahti. The Power-to-Gas plant will be implemented in two phases, with the first electrolyser of approximately 20 megawatts capacity to be commissioned in 2025. In the first phase, approximately 19,000 tonnes of carbon dioxide emissions will be recovered annually from the Kymijärvi power plants, corresponding to about a quarter of Lahti Energia’s net emissions. The share of district heat produced with the waste heat will increase to about 10 per cent of the total district heat produced annually.
The second phase of the Power-to-Gas plant will be completed by 2030, when the electrolysis capacity of the plant will reach 120 megawatts. Consequently, almost 40 percent of Lahti Energia’s district heating will be produced cost-effectively with waste heat. The amount of carbon dioxide recovered would be more than 100,000 tonnes per year, which is more than Lahti Energia’s own net CO2 emissions.
– After the completion of the Power-to-Gas project, the carbon handprint of Lahti Energia’s district heating production will become carbon negative, i.e. we will enable greater emission reductions than our own operations cause. When completed, the project would turn the district heating system in Lahti into a carbon sink. The agreement signed with Ren-Gas is a significant milestone in the history of the company, comments Jouni Haikarainen, President and CEO of Lahti Energia.
The feasibility study will start immediately in early 2022 and the project is scheduled to move to the next phase later during 2022. The permitting, technical pre-engineering and financing arrangements for the project will start once the feasibility study is ready and its results are positive. The construction of the first phase of the project may begin during 2023 and be completed by the end of 2025.