Hydrogen infrastructure on track to link up supply and demand
Construction of the hydrogen network in the north of the Netherlands is progressing well. Gasunie is on track to have the northern part of the national network completed by the second quarter of 2029. The challenge now lies in kick-starting production and offtake.
‘I’m pleased with the progress we’re making,’ says Gasunie’s Helmie Botter, who is responsible for hydrogen transport in the Netherlands. Gasunie is making significant progress, with the infrastructure developer being furthest along in Rotterdam, where the first results are already visible. ‘We’ve pressure-tested the pipeline there, with positive results. That section will be operational in the first half of 2026.’
The Rotterdam pipeline is initially intended to transport hydrogen produced by Shell’s electrolyser (Holland Hydrogen 1) to the refinery in Pernis. It also forms the first section of the Delta Rhine Corridor (DRC), connecting Rotterdam with the Ruhr region of Germany. On 5 September, the project procedure for the western section of the DRC got underway. This section runs from Rotterdam to Boxtel, where the new hydrogen pipeline will be connected to an existing pipeline, connecting Dutch industrial clusters with each other, with hydrogen storage facilities, and with neighbouring countries.
The hydrogen network is a vital link between supply and demand. The hydrogen in the pipeline will be imports and hydrogen produced locally on shore, and in the future offshore, too. Demand will be concentrated primarily in the industrial and chemical clusters in the Netherlands, Belgium, and Germany.
Northern Netherlands to get a full-fledged network
Gasunie is hard at work in the north of the Netherlands, too. Work is underway on the hydrogen pipeline between Delfzijl and Eemshaven, the section leading to Ommen and Emmen, and the section up to the German border. This last section will make it possible to connect to the hydrogen network Gasunie and other parties are building in northern Germany, which will, when completed, provide access to German industry as far afield as Hamburg and Bremen.
‘We are on track to have this part of the national network completed by the second quarter of 2029,’ says Botter. The HyStock hydrogen storage facility in salt caverns near Zuidwending will also be connected to the network.
The puzzle of supply, demand and transport
According to plan, the hydrogen infrastructure in the north of the Netherlands will be ready in 2029. However, some producers want to start sooner, which is why alternative solutions are being explored. Energy company RWE plans to build a 50-megawatt electrolyser at the port of Eemshaven and would like to have it up and running sooner. To facilitate this, RWE, together with Groningen Seaports, is exploring a kickstarter pipeline: a plastic pipeline that would run from Eemshaven to Delfzijl.
Not just RWE, but Engie, too, has plans for an electrolyser to produce green hydrogen. And Equinor wants to convert natural gas into hydrogen and capture and store the CO2 released in the process, resulting in what’s called ‘blue hydrogen’.
To ensure that hydrogen is supplied to the industrial cluster in the eastern part of Groningen sooner rather than later, Botter is in discussions with regional TSOs to explore how these market players can be connected. ‘There’s a lot of potential, but it’s still a puzzle how we can bring together demand, supply and transport all at the same time.’
Market needs to be cultivated
Gasunie is examining what additional measures are needed to help get the hydrogen market off the ground. The tariffs that Gasunie will soon be charging for hydrogen transport are also important. A new financing model for the national network is being discussed with the Dutch Ministry of Climate Policy and Green Growth.
‘The hydrogen market is developing more slowly than previously envisioned and the forecast costs have increased, bringing the future transport tariffs and Gasunie’s risk position under pressure,’ says Botter. ‘We are currently exploring solutions similar to the German model. This would mean that investments would be spread over a longer period, making tariffs stable, reliable and competitive for market participants.’
Fostering hydrogen demand
The central problem is that supply and demand are not yet sufficiently aligned. Producers are hesitant to make investment decisions until they have certainty about customers being there. On the other side, potential customers are putting off signing contracts until the hydrogen becomes more competitively priced. ‘In all scenarios, hydrogen is part of the energy system of the future. Having affordable hydrogen is under pressure in the short term. Low-carbon hydrogen and fostering demand are key elements in kick-starting the market, as is simplifying the rules in the early years of market development,’ says Botter.
Botter feels that the first step is the hardest. ‘There are a lot of parties who want to offtake smaller volumes of hydrogen, but those volumes alone aren’t enough to justify major investment decisions at RWE and Equinor. Once we have a number of larger producers and offtakers to close the loop, it will be easier for smaller parties to join.’
Conflicting interests in the value chain
René Schutte of HyNorth, a public-private consortium that acts as a value chain coordinator, describes the situation as complex. ‘Interests of the various parties in the value chain are often conflicting. A producer needs to be able to charge high prices to offset their substantial investments, while customers can’t afford to cover a much higher price compared to natural gas.’
The timelines of various parties are also out of sync. ‘Where companies that build infrastructure look 20 years ahead, production companies look 10 years ahead, and customers look 3 to 7 years ahead,’ Schutte explains. ‘This means we need to develop large volumes for transport, slightly smaller volumes for production, and even smaller volumes for offtake.’
Schutte is advocating for government support to break long-term production contracts into smaller, shorter-term offtake contracts. ‘What RWE and Equinor are offering is something very few parties can handle. We need to find a way around this chicken-and-egg problem. The government needs to assume risks – not that this necessarily means that this will cost taxpayer money.’
Government support for the final push
The hydrogen value chain in the north of the Netherlands is slowly getting off the ground. The infrastructure is being built. Producers are waiting for customers, customers are waiting for affordable hydrogen, and both parties face uncertainty regarding grant schemes and tariffs.
Government support is needed for the final push, because the price gap needs to be closed. Further delays in making industry more sustainable would be a shame, Schutte believes. ‘We have no choice. The world must remain liveable.’
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