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Momentum for green hydrogen is growing in North-West Europe

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  • Momentum for green and blue hydrogen is growing fast in Europe
  • The Netherlands leads in announced hydrogen projects, Germany is catching-up fast
  • Project partners from different sectors often team-up to share knowledge and limit risks
  • Gasunie, Shell, Nouryon, Vattenfall, Engie and BP lead the pack

The Netherlands leads in green hydrogen projects, but Germany is catching-up fast

The momentum for green hydrogen is growing fast. Almost every week, a new initiative is announced somewhere in Europe. The EU’s hydrogen strategy, that was presented in July last year, contained clear targets: 6GW installed electrolyser capacity by 2024 and 40GW by 2030. For a transitional phase, blue hydrogen is also in scope. Some EU Member States, including The Netherlands and Germany, announced a national hydrogen strategy with production capacity targets and supporting measures to realise their ambitions in line with the EU’s strategy. The Netherlands aims for 3 to 4GW installed capacity by 2030. Germany targets 5GW by 2030 and 10GW by 2035. Given the ambitious national strategies it is logical that a large number of green and blue hydrogen projects have been announced in these two countries.

Figure 1: Green and blue 20MW+ hydrogen projects in North-West Europe
Figure 1: Green and blue 20MW+ hydrogen projects in North-West EuropeSource: RaboResearch
Figure 2: Announced green hydrogen targets of the EU, Germany and The Netherlands
Figure 2: Announced green hydrogen targets of the EU, Germany and The NetherlandsSource: Europen Commission, BMWi, BMU, Kabinetsvsie Waterstof, RaboResearch

The Netherlands’ proximity to the North Sea, its familiarity with and knowledge of natural gas combined with its excellent infrastructure make it a logical hot spot for low-carbon hydrogen initiatives. There are 11 projects with an announced production capacity of 20MW+. As can be seen on the map in Figure 1 above, all low-carbon hydrogen projects are located in or close to industry clusters near the coast: Eemshaven, Port of Rotterdam and the Port of Amsterdam.

For Germany, the focus on green hydrogen fits in its ongoing energy transition (Energiewende) that started with the decision to exit nuclear power. It also fits Germany’s industrial profile. The strategy makes a clear choice for green hydrogen and aims for global leadership in green hydrogen technology. All 8 projects of 20MW+ are located near important industrial clusters or at the North Sea coast in the north close to The Netherlands or Denmark.

Partners from different sectors team-up

The pilots are often run by consortia with several partners from different sectors each bringing their own sector expertise to the table. Given the technological and financial uncertainties and the investments involved, working in a consortium will likely increase the chances of success and limit potential risks. Typically, a consortium includes an energy company and/or a utility, often complemented by a chemical and/or steel company. Local authorities in combination with a local port are often involved due to the high location dependency of hydrogen production chains.

Figure 3: Sector participation in low-carbon hydrogen projects of 20MW+ in North-West Europe
Figure 3: Sector participation in low-carbon hydrogen projects of 20MW+ in North-West EuropeSource: RaboResearch

Gasunie, Shell and Nouryon lead the pack

Gasunie is a driving force behind 20MW+ blue and green hydrogen projects in The Netherlands and Germany. As the Transmission System Operator (TSO) for natural gas in The Netherlands and the northern part of Germany, it has a long track record with the transport and storage of natural gas in The Netherlands, which makes it a logical stakeholder in hydrogen projects. Moreover, The Netherlands has opted to phase-out natural gas from urban areas in order to cut GHG-emissions by 49% by 2030 and 95% by 2050. Also power supply must be carbon-neutral by 2050.

The European oil majors Shell and BP are switching their attention cautiously to renewable energy, as we move towards a carbon-neutral society to limit global warming to below 2 and preferably 1.5 degrees Celsius. Not only because their business model must change in the long term, but also because the green investment agenda in Europe is developing fast and the financial sector and its regulators are increasingly pursuing green balance sheets.

For Nouryon, as a specialty chemicals producer, green hydrogen is interesting as a green feedstock in chemical processes. In the EU, chemical reactions in chemical processes accounted for roughly 9% of the GHG-emissions in 2017. Energy production and use is responsible for 75% of Europe’s GHG-emissions, which means that if Europe wants to become carbon-neutral by 2050, it needs to do more than just greening the produced and used energy.

As energy producing utilities, Engie and Vattenfall are keen on developing a market for green hydrogen. Green hydrogen can serve as a battery in an energy system based on renewables. Additionally, curtailment due to overcapacity during windy and/or sunny days can be avoided by connecting electrolysers to the network that produce green hydrogen. Alternatively, green hydrogen can be used as fuel in situations where electrification is not an option, such as industrial high heat processes, or shipping and aviation.

Figure 4: Key players in 20MW+ projects
Figure 4: Key players in 20MW+ projectsBron: RaboResearch

In the list below we have made an attempt to provide an overview of announced 20MW+ projects in The Netherlands, Germany, Denmark and Belgium. It shows project participants, capacity, used technology and a brief description.

Table 1: List of announced 20MW+ green and blue hydrogen projects in North-West Europe
Table 1: List of announced 20MW+ green and blue hydrogen projects in North-West EuropeSource: RaboResearch
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Author(s)
Hyung-Ja de Zeeuw
Rabobank KEO

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