Netherlands Funds Hydrogen Storage Plan

Written by Martin Lynch, European News Editor for IIR News Intelligence (Sugar Land, Texas)

Summary

Government funding has been made available to support the construction of a series of hydrogen storage caverns as part of the Netherlands' strong backing for green hydrogen development.

Funding Support

The Dutch government has announced that it will provide 450 million euro (US$515 million) in funding to help construct the nation's first hydrogen storage caverns as part of its ambitious green hydrogen strategy. 

The funding will go to state-owned transmission system operator (TSO) Gasunie which is constructing the first of four proposed storage caverns in Zuidwending, in the north of the country. Under the HyStock initiative, the salt caverns at Zuidwending, which were formerly used for gas storage, will be repurposed to store up to 6,000 tonnes of hydrogen each for use by industrial customers or used as feed in power stations. The first storage facility is due to come into operation in 2031. According to Industrial Info Resources data, there are 34 green hydrogen projects underway in the country worth US$4.5 billion in investment. 

Lowering Risk 

The government justified its financial aid by highlighting that private investors face substantial risk in the emerging green hydrogen market. It noted that realizing a hydrogen storage project can take 10 to 15 years from concept to commissioning, which means that "[third] parties are currently unable or unwilling to bear these risks entirely independently." The three key risks are: the uncertain price of so-called cushion gas, the risk that storage will not be sufficiently filled in the first few years, and potential delays due to permits.

The Government Take

"For a well-functioning hydrogen chain, it is necessary to develop production, transport, use and storage simultaneously," according to the government. "A well-functioning hydrogen market stands or falls with sufficient storage capacity. Deep underground storage makes it possible to keep hydrogen produced in abundance during peak periods available for times of scarcity. Without storage, production, transport, and consumption become unbalanced, making it difficult for the market to develop."

Stientje van Veldhoven, Minister of Climate and Green Growth, said: "A sustainable energy system is built in conjunction. That is why we are now also investing in hydrogen storage. In this way, we ensure that clean energy is available when we need it, strengthen our energy security, and create the preconditions for an innovative and competitive economy."

Project Timeline

Gasunie has been working on a hydrogen storage plan since 2022.  Zuidwending was officially chosen as a location last August, due to its former role as a gas storage site and also its proximity to the country's hydrogen transport network which is also being developed by Gasunie. In February, exploratory drilling and leaching of the first proposed cavern was carried out, with assessment of the others to follow. Last month, HyStock selected HyAlliance (a joint venture between Bilfinger and Jorritsma Bouw) as the contractor for the construction of the above-ground installation of the underground hydrogen storage facility in Zuidwending. 

Netherlands Hydrogen Plan

The government is implementing the Dutch Hydrogen Strategy, which aims to make the country a leading European clean hydrogen hub. It wants 4 to 8 gigawatts (GW) of electrolysis capacity by 2030, supported by the repurposing of existing gas grids and major import infrastructure via the Port of Rotterdam. It is backed by billions of euro in subsidies. A national hydrogen network - Hynetwork - is under development to connect major industrial clusters including Rotterdam, Groningen, and Chemelot. Links are also being developed to Germany's pipeline networks.

Key Takeaways

• The Dutch government has allocated 450 million euro (US$515 million) in funding to help construct the nation's first hydrogen storage caverns.
• The Netherlands has ambitious plans to become a hub for green hydrogen production and transport in Europe.
• Industrial Info Resources is tracking 34 green hydrogen projects underway in the country worth US$4.5 billion in investment.

About Industrial Info Resources
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, Industrial Info Resources is tracking over 250,000 current and future projects worth $30.2 Trillion (USD).