Finland’s cheap electricity is not a myth, and the hydrogen economy is coming

Former President of the European Central Bank Mario Draghi published its report on the EU’s competitiveness a month ago and gave bad numbers about the EU’s development.

In an extensive report, Draghi stated about energy that in some places electricity costs 2-3 times more than in the United States and partly also in China.

However, the electricity price claim was only a partial truth. Eurostat’s five-year electricity statistics 2019–2023 show concretely that the price of electricity for high-consuming industries is clearly cheaper in Sweden and Finland than in other EU countries and cheaper than in the United States or China. Only in the crisis year 2022 did the price in the North rise above the level of China and the United States.

Eurostat’s statistics include the price of energy, taxes and network compensation.

In Germany, on the other hand, the price of electricity for industry has, in accordance with the rule, been clearly more expensive than in other countries in comparison years. In practice, Draghi’s message was that the EU’s problem is Germany, which is still paying heavily for the mistakes of its own energy policy.

Last year, Finland and Sweden clearly had the cheapest wholesale electricity prices in the whole of Europe. In the comparison, the price range of Sweden, Norway and Denmark was used in their capital regions, i.e. the regions with the busiest economic activity.

The electricity price outlook, i.e. the future prices until 2030, supports this message – admittedly to a limited extent, because the trade has been conducted with thin purchase volumes.

In any case, the electricity price level in Germany, which has sworn to the hydrogen economy, would be 80–90 percent higher than in Finland.

Finland’s problem is still Europe’s worst price fluctuation in the price of electricity. For many consumers, hourly prices that vary from one extreme to another are anathema, but precisely the price flexibility is the important competitive advantage in, for example, the production of hydrogen or hydrogen-based products.

Although the prospects of the hydrogen boom have of course turned into a crisis winter due to the price of money, inflation and the world’s geopolitical situation, you should not get confused by this.

A big problem for investors has been, for example, the fact that the definition of green and other hydrogen has been debated for far too long in the EU. Now the definition is at the very end in the EU and the categories will be renewable, low-carbon and non-low-carbon hydrogen.

The first two are important for Finland. Wind and sun can be used to make renewable and nuclear power can be used to make low-carbon hydrogen.

According to the energy industry’s estimate, Finland now has a 15–20 year lead compared to many other EU countries. From the 2040s, solar electricity will become perhaps the most competitive source of clean hydrogen in southern Europe.

Before that, Finland must ensure its own role in the EU’s hydrogen economy. Instead of just producing hydrogen, the role must be in hydrogen technologies and services and in the production of various hydrogen refineries.