Established: 2017
Climate Fund investment decision: 2021
Funding target: accelerating the rollout of a heat storage solution
Investment: a capital loan of up to EUR 4 million priced on market terms according to the EU interest rate reference table with a convertibles option.
Funding: a capital loan of up to EUR 4 million priced on market terms according to the EU interest rate reference table with a convertibles option.
Main anticipated impact: the market potential of the solution in Finland is nearly half a million tonnes of reduced emissions, which accounts for approximately 1% of Finland’s total emissions. 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 electrification of industry and the 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 requires storage of energy and while electricity production can be emissions-free, the heat and steam required by industrial processes are typically produced with fossil fuels.

Elstor has developed a solution that converts electricity into steam or heat, which can be stored and discharged on demand as required for the customer’s processes. Heat storage reduced the carbon dioxide emissions from industrial steam and heat production by replacing oil, natural gas and LPG as fuels. Elstor’s solution enables the storage of electricity as heat and steam, which is particularly important in the use of locally produced renewable energy.

The Finnish Climate Fund’s funding decisions are subject to three-tier criteria: self-sufficient business operations, verifiable added value in return of State participation in the financing package and compliance with the EU’s six environmental objectives for sustainable financing, known as the ‘do no significant harm’ principle. In addition to the above criteria, emission reduction potential and other impact such as business potential are also required.

Elstor’s heat storage solution combines two elements crucial for achieving carbon-neutral industry: electrification and the storage of renewable energy. Elstor’s market potential of the solution is nearly half a million tonnes of reduced emissions, which accounts for approximately 1% of Finland’s total emissions. With the Finnish Climate Fund loan, the wide-scale rollout of Elstor’s emission-reducing technology will be more efficient than without the funding.

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.

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).