The Finnish Climate Fund has awarded a capital loan of up to EUR 4 million to Elstor Oy to speed up the rollout of their energy solution. The energy storage solution developed by Elstor offers a cost-efficient method of replacing fossil fuels in steam and heat production in, for example, food industry and medium-size district heating facilities. In Finland, the market potential of the solution is nearly half a million tonnes of reduced emissions, which accounts for approximately 1% of Finland’s total emissions.
The electrification of industry and adoption of low-carbon solutions and energy generation are the first steps towards carbon neutrality.
“Electrification and transition to renewable energy sources are often raised as the most significant climate actions. However, the production of renewable energy also requires storage capability and while electricity production can be emissions-free, the heat and steam required by industrial processes are typically produced with fossil fuels. Elstor’s heat storage solution is a response to both these needs in a scale that is feasible and cost-efficient for any customer interested in reducing emissions, such as a bakery or a local energy company,” says Kari Suninen, CEO of Elstor, describing the significance of the innovation.
Elstor has developed a solution that stores electricity as heat energy, which is then discharged as heat or steam as required for the customer’s processes. The heat storage can replace fossil fuels in the production of heat and steam for industrial processes and energy generation. The company currently has two pilot units: one for heat and one for steam production.
“The funding will speed up the rollout of Elstor’s low-carbon solution particularly among small and medium-sized industrial enterprises. We can provide Elstor a clear incentive with our fixed-term and unit-specific funding instrument to speed up the transition from fossil fuel-based heat and steam production to the storage and utilisation of renewable energy. Our working capital loan enables Elstor to offer its units to industrial customers through leasing contracts, which might prove a more attractive option for Elstor’s customers compared to a one-off investment in equipment,” Paula Laine, CEO of the Finnish Climate Fund, explains.
“Globally we are undergoing the fourth industrial revolution and investment needs are huge as we build the energy infrastructure to support the use of renewable energy. Besides reducing emissions, our heat storage system supports the increasing our energy self-sufficiency. The funding offered by the Finnish Climate Fund is an excellent instrument for speeding up the marketing of technologies such as our heat storage solution and, in fact, this type of funding has been sorely lacking in Finland,” says Ari Piispanen, Chair of the Board of Directors at Elstor Oy.
Heat storage reduces the carbon dioxide emissions from industrial steam and heat production by replacing oil, natural gas and LPG as fuels. Elstor’s solution enables the cost-efficient storage of electricity as heat energy, which is particularly important in the use of locally produced renewable energy.
The theoretical storage capacity of a unit is 5 MWh and the maximum energy flow per day is approximately 15 MWh. Based on daily use, the thermal efficiency is 90–95%. The equipment can be operated remotely as a stand-alone unit and servicing is required only for a small number of pumps and actuators.
The emissions reduction potential per unit depends on the type of replaced fuel and the amount of electricity used. The average annual emission reduction potential per unit is approximately 300–500 tonnes of CO2.
The Finnish Climate Fund loan:
The Finnish Climate Fund offers a capital loan of up to EUR 4 million to finance Elstor’s working capital investments in the next two years. The Finnish Climate Fund loan may be drawn down for each unit separately and the funding for each device is subject to proven reduction in emissions and successfully secured other funding (50% at minimum).
The interest rate of the Finnish Climate Fund capital loan has been priced on market terms according to the EU interest rate reference table. In addition, a share exchange option is attached to the financing agreement, which means that the Finnish Climate Fund has the option to convert debt into equity shares.
In addition to reducing emissions, this funding decision also benefits the business opportunities of other operators in Finland through lower heat and steam production costs. The solution also has significant export potential as the product responds to a globally recognised demand.
Saara Mattero, Communications Director, Finnish Climate Fund, tel. +358 (0)400 114 777, firstname.lastname@example.org
Kari Suninen, CEO, Elstor Oy tel. +358 (0)40 558 3706 email@example.com
The Finnish Climate Fund is a Finnish state-owned special-assignment company. Its operations focus on combating climate change, boosting low-carbon industry and promoting digitalisation. The Climate Fund invests in large-scale projects in which the fund’s investment is crucial to enable the project’s realisation in the first place, on a larger scale or earlier than it would with funding from elsewhere.
Elstor Oy develops and manufactures chargeable heat storage solutions for industrial heat and steam production. Elstor’s solution enables carbon-neutral, emission-free and cost-efficient generation of heat energy.