The CEO's column
A few minor setbacks in the green transition, but not a 'green bubble’
In my column in the last edition of FVB-Nytt, I wrote about the climate transition taking place within industry, transport and energy production, and how we continue to progress at full speed despite the recession. Since then, a number of major industrial electrification projects have been cancelled due to setbacks, and this has received a lot of media attention. We have all been following – and continue to follow – developments at Northvolt and all the problems the company faces. We have also read that Ørsted is pulling out of building the E-methanol plant at Örnsköldsvik (FlagshipONE) and that LKAB is postponing its plans for Hybrit in Kiruna. When a number of major, high-profile investments suffer setbacks in this manner, it is easy to get the feeling that the entire green transition is stalling. The ‘green bubble’ is said to be close to bursting, drawing parallels to the IT bubble in the early 2000s. There are undoubtedly similarities, but there are also fundamental differences. Both instances involve major restructuring of the economy. The IT boom was driven by the opportunities created by the rapid technological development of computers and especially the Internet. Investors poured money into the development of various online services they hoped would find favour with the market, but creating demand for such services proved to be harder than they thought, and the bubble burst. Nevertheless, not many years were to pass before technological development and supply and demand harmonised and the transition became reality.

The difference now is that there is global demand for the green transition. Change is essential to be able to meet the climate challenge, awareness of which has created considerable demand for non-fossil products. The investment being made at this time is mainly going into developing technology and industrial processes to meet existing demand, which will probably increase through the introduction of new controls and regulations. This readjustment needs to constantly occur in parallel at various levels of suppliers and consumers, which means that setbacks are only to be expected. Generally speaking, change seems to be moving steadily forward. For example: a number of projects of various sizes are under way for the production and distribution of hydrogen in Sweden. Many projects within green steel, e-fuels and CCS are also still on track. Any ‘green bubbles’ are therefore not apparent at this time.
We are approaching the end of the year, and we can conclude that 2024 was yet another challenging year for the energy industry. The price of biofuels is still at a historically high level, even though a downward trend can be discerned. It is also very hard to predict how the price of electricity will develop moving forward, as it is affected by so many parameters. Not least our ability to expand the electricity system, through increased non-fossil electricity production and by extending the power grid’s capacity, and at what speed the electrification project can be executed. Global geopolitical unrest also has a role to play here, as the need for heightened crisis management can restrain the development of our energy systems.
What all this means is that choosing the right future-proofed solutions in conjunction with renewal of district heating systems remains difficult. That’s why building a flexible system with plenty of room for optimisation is important. The situation also creates a lot of incentive for district heating operators to improve efficiency in their systems or seek alternative sources of heat, such as surplus heat. It is well worth looking at cutting the temperature level in the system. By cutting the system temperature, grid losses are reduced and an opportunity to increase energy yield from flue gas condensers, heat pumps and surplus heat sources is created. FVB produced a manual on behalf of Energiforsk on how to efficiently and successfully reduce temperatures in the system, which will hopefully help district heating operators to increase the efficiency of their systems. You can read more on this topic later in this edition.
And in this edition of FVB-Nytt, you can also read about Mälarenergi’s new underground thermal energy storage (UTES) facility, created by converting an existing oil bunker. The facility has a volume of 300,000 m3, which translates to a storage capacity of 13 GWh, making it the world’s biggest energy store. FVB was involved with calculations, design, system construction and commissioning. High storage volume is key to utilising the system’s flexibility and running the district heating system as efficiently as possible. More storage volume in the system improves the chances of optimising operation, especially in complex production systems with many different types of units. Apart from capping output spikes and avoiding having to start up and run peak capacity plants, running CPH plants and heat pumps can be optimised according to heat demand, electricity price and the market for support services on the electricity grid (a market that can also be a key future income stream for many district heating companies).
Winter has arrived early in many places across the country, with substantial snowfalls. On the other hand, it was not as early as last year, so perhaps most of us managed to change to winter tyres and clear leaves before the snow fell. We appear to be entering a slightly warmer period, which means it will be interesting to see whether we get a white or a green Christmas this year. Whichever we do get, we look forward to a cosy, relaxed and well-earned holiday.
On that note, everyone at FVB wishes all our customers a very Merry Christmas and a Happy New Year!
Per Skoglund,
CEO FVB Sweden