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Allianz invests in Finnish green hydrogen and PtG

Allianz invests in Finnish green hydrogen and PtG
Allianz Capital Partners (ACP) to acquire a minority stake in green hydrogen and power-to-gas (PtG) project developer Nordic Ren-Gas Oy.

Germany-headed renewable energy and infrastructure investors Allianz Capital Partners (ACP), part of Allianz Global Investors and Allianz insurance companies (Allianz), has announced that it has signed an agreement to acquire a minority stake in the Finnish green hydrogen and power-to-gas (PtG) project developer Nordic Ren-Gas Oy (Ren-Gas).

Established in 2021, Ren-Gas is a leading Nordic PtG project developer with the goal to develop a decentralized power-to-gas (PtG) portfolio – first in Finland with the potential to be expanded wider in Europe.

Allianz will provide EUR 25 million of funding to Ren-Gas to support its project portfolio towards execution and accelerate the business of the company.

Allianz will also become a minority shareholder in Ren-Gas with a pre-agreed framework to invest in the Ren-Gas portfolio of projects.

Allianz has been invested in Finland since 2016 through its participation in electricity distribution company Elenia and several wind farms. We see great potential in Ren-Gas and consider it an excellent opportunity to create green solutions for the transport and energy sector in Finland and beyond. The Ren-Gas team has impressed us with regards to sector knowledge, operational experience, and commitment and managed to build a strong as well as a tangible pipeline of energy transition projects which we are excited to support in the future, said Igor Lukin, Senior Portfolio Manager at Allianz Capital Partners.

Carbon capture and utilization

The main product of Ren-Gas plants is renewable synthetic methane aka synthetic natural gas (SNG), which is made from green hydrogen and captured carbon dioxide (CO2).

Ren-Gas will produce green hydrogen using renewable energy from local wind farms for the electrolysis. Via subsequent methanation, the green hydrogen is then combined with captured biogenic CO2 from district heating plants utilizing mostly renewable fuels, while simultaneously excess process heat is provided back to the district heating network.

As synthetic renewable methane´s chemical composition is similar to fossil gas, biomethane aka renewable natural gas (RNG), the gas can be used as fuel by heavy-duty trucks, ships, and for other industrial purposes.

In summary, the process generates renewable methane from water, wind power, and captured CO2.

We consider this a significant milestone in our commitment to investing in projects that help drive the energy transition. Ren-Gas is our second direct infrastructure investment in Finland and our first direct investment into green hydrogen underscoring Allianz’s effort to support the decarbonization process through tangible infrastructure projects, said Michael Pfennig, Co-Head of Infrastructure at Allianz Capital Partners.

According to Allianz, the company’s key strength lies in its approach to developing green PtG plants in connection with existing power plants and district heating systems and thus effectively utilizing the value of sector coupling.

This sector integration approach will help to contribute to stronger energy security, competitive renewable gas and heat prices, together with significant emission reductions in the heavy road transport sector and in the heating sector.

We appreciate Ren-Gas’ innovative approach to develop green power-to-gas plants in connection with existing power plants and district heating systems and thus effectively utilizing the value of sector coupling, Michael Pfennig said.

Ren-Gas has already established a strong position in the fast-developing green hydrogen market with five industrial-size projects under development together with local Finnish energy utilities.

Ren-Gas has focused on an analytical, transparent, and value-based approach in the development of its business with utility partners and other stakeholders. This approach has enabled Ren-Gas to create a portfolio of well-structured, financeable hydrogen and power-to-gas projects. We are extremely happy that Allianz, as one of the world’s leading insurers and asset managers, recognizes the value of the Ren-Gas approach to project development and becomes our partner to support the development of our hydrogen projects to execution. I am convinced that as our partner Allianz will provide a strong basis for us to develop and finance our projects and move our unique team forward, commented Saara Kujala, CEO of Nordic Ren-Gas.

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