Electricity should form the core of the new energy system in the Netherlands in the future, with hydrogen playing a crucial supporting role. Although much work remains to be done, numerous developments are underway, many of which are connected to the activities of the Dutch natural gas sector. From government plans concerning energy infrastructure to investments in green hydrogen, many parties are looking towards the future, though not always in concrete terms. Through five key questions, we provide an interim update.
What will be the role of hydrogen in the 2050 energy system?
Recently, former acting Minister of Climate and Energy Rob Jetten informed Parlement about the North Sea Energy Infrastructure Plan (EIPN; read more about it here, in Dutch). This plan highlights the significant role of (green) hydrogen in the 2050 energy system. In broad terms, large-scale wind energy will be produced in the North Sea, which will then be converted to hydrogen offshore. This hydrogen will subsequently be transported to land (or stored offshore) for use (or storage onshore).
Therefore, hydrogen is essential to make much of our (sustainable) energy usable, but the exact implementation of this system is still unknown. Questions include: how much will the Netherlands produce itself, and what proportion will be offshore versus onshore? Will the Netherlands remain a European hub for these energy molecules, as it currently is for natural gas? An optimal system depends for example on the development of technological innovation and the hydrogen market. Both the technology and economy surrounding hydrogen are in their infancy compared to the scale they will eventually reach.
This also relates to the advice given to the EIPN by TNO and Deloitte. They state that it is feasible, but much still needs to be worked out within tight timelines. Short-term ambitions (by 2030) may need to be adjusted downwards as a result.
What is the status of hydrogen production?
Government plans, particularly the VAWOZ (Connections for Wind on Sea Landings Programme), suggest that by 2050, there will be around 16GW of offshore electrolysers, with 500MW capacity per electrolyser. For comparison, the current electrolyser of the PosHYdon project, which is currently in the testing phase, has a capacity of 1MW. The next step will be taken by the N05-A project of ONE-Dyas, which intends to install a 5MW electrolyser on their offshore platform as a test. These projects aim to achieve electrolysers of 50-100MW by 2030.
Progress is evident, but significant steps in scaling up are needed. Producing hydrogen offshore is the most sustainable method, as renewable power is used, and the highest efficiency is achieved by producing as close to the source as possible. However, offshore conditions are harsh and bring technological challenges.
Note that this discussion focuses solely on green hydrogen projects, but blue hydrogen (produced from natural gas with CO2 capture) is necessary for the transition. More on this later.
What is the status of transport and storage?
Firstly, over longer distances (more than 100 kilometers), it is more efficient and cost-effective to transport energy in the form of hydrogen (molecules) rather than electrons. Therefore, producing hydrogen in large wind farms in the North Sea requires pipelines instead of cables to transport it to land.
Onshore, Gasunie has been designated as the network operator of the hydrogen network. It seems logical for them to assume the same role offshore, though this is not yet official. However, Gasunie has been tasked with engaging in discussions with NGT and NOGAT (owners of the largest pipeline networks in the North Sea) about how this existing infrastructure can be utilized and reused. One of the criticisms of the EIPN was that it paid insufficient attention to this reuse, despite its clear advantages over constructing new infrastructure.
Recently, it became clear that the work on the hydrogen network will take a significant amount of time. The so-called Delta-Rhine corridor, which connects industries in Rotterdam, Moerdijk, and Antwerp with Chemelot in Limburg and the Ruhr area, is a bundle of hydrogen, CO2, and ammonia pipelines. This crucial connection for the transition to and distribution of renewable energy is expected to be delayed by four years and is now anticipated to be completed only by 2032.
Regarding hydrogen storage, empty gas fields and salt caverns are often mentioned. A key difference is that gas fields tend to have higher contamination levels due to residue in the reservoirs. It remains to be seen what the exact purity requirements will be and whether these (offshore) gas fields will be suitable. Onshore salt caverns are more favorable but limited in capacity.
Is there still a place for blue hydrogen?
As mentioned earlier, blue hydrogen is seen as a crucial solution during the transition to green hydrogen. This is stated in the National Energy Plan (NPE), which was established at the end of 2023. The growth in the production and transport of renewable electricity is too slow to facilitate the growing demand for CO2-free electricity and green hydrogen. The exact details of how, how much, and where blue hydrogen will be produced are still unknown.
Blue hydrogen is a quick way to reduce (scope 3) emissions while simultaneously accelerating the CO2 storage market. Producing it, of course, means more use of natural gas, which is also necessary during the energy transition.
Where should the investments in hydrogen come from?
Recently, reports have indicated that investments in green hydrogen are lagging. Given the steps that still need to be taken and the many questions regarding implementation, this is understandable. Many uncertainties, such as the market for hydrogen, make it too unpredictable for investors.
As a result, there are numerous European funds and subsidies available, such as the Innovation Fund, Horizon Fund, and Just Transition Fund, to name a few. These provide billions of euros for hydrogen projects for various purposes, such as infrastructure, stimulating demand in mobility, and energy transition in industry.
At the same time, the Dutch government is entering into contracts for green hydrogen in countries like Morocco, Oman, South Africa, and Namibia. Meanwhile, the new cabinet plans to cut €250 million from green hydrogen funding.
Ultimately, the goal of the new energy system is to become less dependent on foreign energy. The potential and ambition are there, but much work remains to be done on the plans and execution.