Latvia hosts international forum on hydrogen’s huge investment potential

To find ways how European hydrogen valleys can support Latvia's potential in renewable green energy, for the first time an international investment conference, the first Latvian Hydrogen Forum, Tech Tour, took place in Riga, bringing together start-ups, investors, national and local decision-makers.

The Forum is a unique opportunity for Latvian entrepreneurs to get to know European hydrogen initiatives that have already been approved, and are being implemented, while at the same time it is a unique chance for investors to meet with start-ups.

Placing Latvia on the hydrogen map 

"This is a powerful way to “put Latvia on the hydrogen map”, showing international investors Latvia's potential. For several years, Riga has been the only city in the Baltic states with hydrogen filling stations, hydrogen electric trolleybuses running through its streets, and a number of active projects involving both the association and companies. There are several start-ups in Latvia that have successfully attracted investments through similar events, and this conference was also an opportunity for enterprising minds to present their initiatives to investors from different countries," says Girts Greiskalns, Chairman of the Board of the Latvian Hydrogen Association.

Compared to the Baltic neighbours, which have defined specific areas of their countries as hydrogen valleys, Latvia can be considered as one big hydrogen valley, as the technology development has not chosen to focus on one specific city or area in order to keep an open mind from every entrepreneur,” says Viktors Valainis, Minister of Economy.

"Latvia has great potential to produce hydrogen and its derivatives using renewable energy sources. This is an essential step towards achieving our goal of making Latvia's economy more productive and export-oriented. Although the hydrogen economy is still in its infancy, we can already foresee that Latvian companies could become major players in hydrogen at European level. The Ministry of Economy is currently developing a National Zero Emission Technology Strategy, which will promote both the production and export of green hydrogen and its chemical compounds, as well as support for port infrastructure and other production related to the hydrogen ecosystem," emphasises the Minister of Economy.

Seeking Pan Baltic cooperation

 

The energy sector has grown rapidly in recent years, accounting for almost a third of global investment, and this shows the enormous potential of the energy sector. This "investment wave" is a unique opportunity for Latvia to establish itself as a leading player in the global energy landscape. Hydrogen is a good example of how such technologies, which are in a growth phase, can provide Latvia with an opportunity. 

For the Latvian Investment and Development Agency, the development of the ELWIND offshore wind project in cooperation with Estonia demonstrates the joint work and commitment of two European Union countries to renewable energy sources, in particular offshore wind.

"ELWIND is a joint project between Latvia and Estonia, the main objective of which is to develop offshore wind farms in the Baltic Sea to increase the region's security of electricity supply and reduce dependence on fossil fuels. The project will contribute to the transition to green energy, helping to meet the European Union's climate goals, as well as strengthening local industry and technology development," explains Laura Strovalde, Deputy Director for Investment and Energy at the Latvian Investment and Development Agency.

Arnis Gulbis, Director of the Riga Digital Agency: "The Riga Digital Agency is actively working on digital innovation and we want to assess how the municipality can provide the digital infrastructure and innovative solutions needed to support the development of a hydrogen economy not only in Riga but across Europe. One solution would be to develop a digital twin that can accurately model and optimise hydrogen-based solutions to create a greener and more sustainable future. TechTour Hydrogen Valleys Investment Forum 2024 is a great opportunity to exchange ideas and jointly drive the projects that will shape our future."

Aivars Starikovs, Member of the Board of Hydrogen Europe, explains: "Today, the European Hydrogen Association has around 600 members, which just goes to show that hydrogen is not a new industry, but the point is that today we need to change the approach: the first step that LIAA takes is to support the ideas, the initial research. The next step is where to test the ideas, which requires a startup environment, a platform like TechTour that allows startups to meet investors. Next, you need a city to test the idea, or these sandboxes. Trains, locomotives, buses, hydrogen boats, all this is possible with the expertise available in Latvia.

PKN Orlen, one of the supporters of Latvian Hydrogen, stresses that participation in the European Hydrogen Valley Investment Forum is in line with the company's commitment to energy diversification and sustainable development. "As the largest fuel supplier in the Baltic region, we recognise the importance of remaining competitive while developing the hydrogen economy. Hydrogen will play a key role in Europe's energy transition and through innovation and strategic investment, Orlen aims to strengthen its leadership while ensuring that Europe remains at the forefront of global energy. This Forum provides an important platform to engage with key stakeholders to drive these goals forward," said Grzegorz Jozwiak, Director of Hydrogen and Synthetic Fuels at PKN Orlen.

Hydrogen – new direction for Tech Tour

The Tech Tour Community started as two separate organisations 20 years ago, Europe Unlimited, founded in 1998 by William Stevens in Brussels, and Tech Tour, founded in 1998 by venture capitalist Sven Lingjaerde in Geneva. "We are connecting technology entrepreneurs and financial and corporate investors all across the wider Europe, including the UK and also Israel and Turkey. The European Hydrogen Valleys is its first programme in the green hydrogen sector, while there are other energy-related directions as well," explains Tech Tour’s Group Managing Director William Stevens.

Mr Stevens said that the new direction started with more than 65 companies applying, and there were 35 investors on the selection panel. "About a quarter was from Latvia, and eight to ten companies passed the selection. In addition, we also have some associations or clusters that represent hydrogen valleys, which are typically an association of different companies and government agencies."

Price challenges in the hydrogen sector

"Previously, from the companies selected in the last eight years, 81% raised money, and 77% was about to attract investment after they were at the Tech Tour. We think this figure will be somewhat lower on hydrogen, because hydrogen sector has a price competitive challenge compared to other energy sources, like oil gas coal, which are, of course, carbon heavy. But hydrogen is actually a very smart transportation tool for energy coming from solar and wind sources, or biomass, and transforming that into a liquid or fuel to be delivered to big industry or transport usages. The challenge is present at different levels. First of all, the production of green hydrogen, and green energy, of course, is still challenging, and there's not enough of it, nor it is easy to store it," said Mr Stevens. 

He noted that the price of green hydrogen today is still five to six times higher than the price of conventional energy. The most obvious sectors to use green hydrogen instead of hydrogen produced from coal or gas include chemical industry, steel and cement production, as well as heavy duty transport. "They want to contribute to reductions of carbon emissions, and therefore use as much as possible green energy, and green hydrogen is part of the equation."

The usage is still small, but it could be growing with the reduced price and the increased demand from customers, and their readiness to pay a substantially higher price for the green energy product.

Valleys around potential consumers 

Hydrogen valleys is an instrument to create local hydrogen usage systems in a geographic area, like a city, region, island, port, or industrial cluster. They are intended to cover a substantial part of the value chain, from green hydrogen production, storage, and transport to its end use in various sectors (industry, mobility, energy) with the goal to mitigate the climate change and develop regional economies.

"When you can consume more energy, clean hydrogen becomes more attractive for investment. The usage can include, for example, utility vehicles in ports, warehousing, heavy duty public transport, data server parks, and aviation with its high taxes. A valley can represent a combination of energy consuming sectors, and solar, wind parks with a hydrogen storage facility. All of this makes a valley an interesting dimension," explained Mr Stevens.

He also predicted a growing demand for clean hydrogen once the technologies continue to develop, and it becomes even a better investment than electrical energy. "For example, municipal transport companies may want to invest in hydrogen because it can be a better long-term investment than electrical buses, while it's still more expensive today. But the price of hydrogen will go down in the future. There may be more industries and consumers that make their choice in favour of green hydrogen. As well as there is an element of procurement by public authorities or by semi-public authorities, like ports and municipalities in combination with the private sector that is increasingly wanting stable sources of energy, and green hydrogen can be a stable energy source. Thus, a sufficient offtake demand can be created so that the more expensive production costs can be scaled."

The Latvian Hydrogen Forum and the European Hydrogen Valley Tech Tour investment conference in Latvia took place in cooperation with the Latvian Hydrogen Association, the Latvian Investment and Development Agency, Riga City Council, and the Embassy of the Netherlands in Latvia.

Tech Tour, Europe's largest investor community, in its newest Impact Data report states that entrepreneurs who presented at Tech Tour events have historically raised over €26.5 billion in investments from 2016 up to the end of 2023.