Sat.
May 8
2021
Netherlands on path to scale hydrogen
Image: Samuele Giglio via Unsplash

Clean-burning green hydrogen path to scale as a fuel got a boost as the Dutch government has tabbed 388 million euros for its development.

The spending, part of a larger 5-year Return To Growth plan, is particularly significant as Holland is seen as an important early hub for the use of the environmentally friendly fuel.

The Netherlands is home to Europe’s largest port complex, Rotterdam, as well as major industry. This presents a dense group of potential consumers for green fuel with minimal transport-to-market requirements. Some local industries, from refining to fertilizers, already use hydrogen from fossil fuels, which they may replace as they seek to hit emissions reduction targets under the European Union’s new green strategy.

Green hydrogen is created when the fuel is manufactured using carbon-free electricity from renewable energy, such as wind generation, instead of reforming natural gas, which is the norm. Currently, the price difference between the two methods is so steep that green hydrogen remains uncompetitive.

So don’t expect a big green hydrogen rollout anytime soon. Yet the groundwork is being laid.

Major and growing wind installations in the North Sea off the coast of Holland are able to deliver high volumes of power at increasingly cheaper rates. And those volumes of electricity are coming ashore in a big and viable potential market for the clean fuel.

Detractors will question the rationality of using electricity to create hydrogen as opposed to simply supplying it directly to the grid. And that’s a fair point. 

Yet hydrogen itself is somewhere between fuel and battery. On the whole, the element is much more like a battery. It’s a way to store and transport the energy used to create it. That can become the key to balancing the variability in wind generation, without all the mining and rare earths required for battery storage.

On the other hand, hydrogen does resemble a fuel in that it can be carried, or burned, in a combustion engine once converted into form. This could be useful in longer haul transport such as marine shipping, which demands reliable, transportable fuels. That potential use again tabs Hollands and its shipping as a potential early market mover.

Hydrogen won’t solve its price problem anytime soon. Yet the likely path to viable growth will be expansion from hub areas. Holland’s state support for the fuel is therefore encouraging, as are other converging elements – a locus for increases in green power from wind generation, and a clutch of large and handy industrial customers interested in carbon reduction.

By Stephen Bierman

Stephen Bierman is an energy markets journalist and the editor of New Economy Observer.

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