{"id":72167,"date":"2025-10-16T10:52:16","date_gmt":"2025-10-16T07:52:16","guid":{"rendered":"https:\/\/www.sweco.fi\/?post_type=blog&p=72167"},"modified":"2025-12-01T13:43:35","modified_gmt":"2025-12-01T11:43:35","slug":"why-are-hydrogen-projects-stalling","status":"publish","type":"blog","link":"https:\/\/www.sweco.fi\/en\/blog\/why-are-hydrogen-projects-stalling\/","title":{"rendered":"Why are hydrogen projects stalling? \u2013 multiple factors have slowed down the energy transition"},"content":{"rendered":"
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I’m tired of reading news about how electricity-intensive investments, such as hydrogen plant projects, are not progressing \u2013 without any explanation.
\n\u201cIndustrial investments are starting more slowly than predicted, but the underlying reasons are discussed less. The energy transition has not been cancelled!\u201d<\/em> says Sweco\u2019s industrial energy expert Erkki H\u00e4r\u00f6.<\/p>\n

Underlying reasons.<\/strong><\/p>\n

I emphasize that launching a new market segment is always difficult. The situation is not helped by the fact that this decade has seen COVID, wars, and a challenging customs situation.<\/p>\n

There are other factors creating uncertainty:
\n1. If fossil fuel prices do not rise, renewable energy solutions are not competitive.
\n2. As countries increase defense spending, the EU must abandon some of its energy transition goals.
\n3. New technologies carry more risks than those used for decades.
\n4. The end-product market is global, making it hard to predict things like legislation related to aviation fuels.<\/p>\n

\u201cEach of these challenges could be tackled individually, but solving the whole picture is more difficult,<\/em>\u201d H\u00e4r\u00f6 continues.<\/p>\n

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Explore P2X services \u00bb<\/a><\/p>\n<\/div>\n

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Normal development path.<\/strong>
\nAlthough hydrogen investments have not started as expected, the development path is actually typical:<\/p>\n

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  1. All innovations initially face huge enthusiasm, and everyone wants to ride the wave.<\/li>\n
  2. Realities cause many to lose their initial excitement.<\/li>\n
  3. A new rise begins toward a more stable and sustainable development level.<\/li>\n<\/ol>\n

    Climate change.<\/strong>
    \nI emphasize that change will happen because it must happen. The climate has already changed, and reducing global CO\u2082 emissions is the only option.<\/p>\n

    \u201cIt requires bold political decision-making despite the risks,<\/em>\u201d H\u00e4r\u00f6 clarifies.<\/p>\n

    The hydrogen revolution will happen sooner or later. The transition is just occurring on a different timeline than we expected<\/p>\n

    Enabling the energy transition \u2013 the three critical areas for development<\/h2>\n

    Investments requiring renewable electricity, such as hydrogen plant projects, will only progress if two other energy sector areas develop.<\/p>\n

    These interconnected areas are:<\/p>\n

    1. Electricity production, e.g., wind power<\/a>\u00a0 and solar power<\/a> projects.
    \n2. Electricity consumption, such as     data centers<\/a> and hydrogen\/P2X projects.
    \n3.     Energy networks<\/a>, including the construction of electricity and hydrogen grids.<\/p>\n

    \u201cRight now, the investment cycle is not rolling because each actor must weigh the decisions and timelines of others,\u201d<\/em> H\u00e4r\u00f6 notes.<\/p>\n

    When discussing data center and hydrogen investments, we should remember benefits beyond employment. These projects also enable other major industrial and infrastructure investments.<\/p>\n

    Investment timelines.<\/strong>
    \nDifferent timelines of energy investments must be aligned:<\/p>\n

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    1. Building a hydrogen plant takes 4\u20135 years, but constructing a hydrogen pipeline between countries can take 5\u201310 years.<\/li>\n
    2. Building a solar power plant takes 3\u20135 years, but constructing a new power line can take 7 years.<\/li>\n<\/ol>\n

      \u201cProduction projects will really take off once the infrastructure construction timeline is confirmed,\u201d<\/em> H\u00e4r\u00f6 continues.<\/p>\n

      Permitting.<\/strong>
      \nInfrastructure construction takes longer than plant projects due to the permitting process. For example, if 1000 kilometers of hydrogen pipeline are needed, the route includes:<\/p>\n

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      1. Numerous landowners with whom land use agreements must be made.<\/li>\n
      2. Various ecosystems whose impacts must be assessed<\/a>.<\/li>\n<\/ol>\n

        \u201cThat\u2019s why it\u2019s good news that the Finnish government aims to streamline the permitting processes for energy lines.\u201d<\/em><\/p>\n

        Electricity sufficiency \u2013 Should we be concerned?<\/strong>
        \nOne concern is the sufficiency of electricity. The fear is unfounded.<\/p>\n

        \u201cAs long as Finland invests in renewable electricity consumption, production will follow.\u201d<\/em><\/p>\n

        Wind and solar power production will be sufficient for everyone if production is sufficiently decentralized across the country.<\/p>\n

        \u201cSomewhere in Finland, it\u2019s almost always windy enough. That\u2019s the future outlook we should focus on instead of spreading negativity.\u201d<\/em><\/p>\n

        Explore green hydrogen services \u00bb<\/a><\/div>\n

        Erkki H\u00e4r\u00f6<\/strong>
        \nEnergy Expert, P2X
        \n        erkki.haro@sweco.fi<\/a><\/p>\n<\/div>\n

        Power-to-x technology is part of the solution<\/a>Carbon capture and utilization enable the reduction of air emissions<\/a>Blog: How to take the next step to hydrogen business?<\/a>Unlocking the hydrogen economys enormous potential<\/a>Blog: Wind energy and green hydrogen<\/a><\/div>\t\t<\/div>\n\t<\/div>\n<\/div>\n<\/section>\n\n\n
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        Please don\u00b4t hesitate to contact us!<\/h3> <\/div>\n
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