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24 January 2022

Weekly data: The Netherlands puts its money where its mouth is on green hydrogen

Mark Rutte’s fourth government has put forward a proposal for a €35bn climate and transition fund, with €15bn specifically for the development of 'advanced renewable energy carriers', including green hydrogen and e-fuels.

By Mirela Petkova

After record-breaking coalition talks, Mark Rutte’s fourth government in the Netherlands is finally a fact. As part of its climate policy, the new cabinet has appointed a minister for climate and energy, 34-year-old Rob Jetten, and brought nuclear back into the spotlight with the proposed construction of two new nuclear power plants.

A general view of Vopakat refinery in the Port of Rotterdam, which is home to large companies producing petrol, diesel and oil. (Photo by Dean Mouhtaropoulos/Getty Images)

Jetten will oversee a new €35bn ($39.7bn) climate and transition fund to accelerate Dutch decarbonisation. The plan includes €15bn specifically for the development of ‘advanced renewable energy carriers’. While this is not clearly defined so far, green hydrogen and e-fuels are expected to be included.

Energy Monitor’s Weekly Data shows analysis done by Rabobank now puts the Netherlands at the top of the European hydrogen race. While Germany has the highest ambition in terms of electrolyser capacity – 10GW by 2030 – the Netherlands has the highest subsidies per gigawatt of electrolyser capacity committed – €1.43bn. This calculation assumes the Dutch government will put at least €5bn aside for hydrogen out of the €15bn for advanced renewable energy carriers. This is the government’s own estimate of what is needed to scale up green hydrogen production.

The Netherlands issued its national hydrogen strategy in 2020. Green, or renewable, hydrogen caught the eye of governments and investors in 2021 for its potential to enable a green recovery. Rising gas prices made green hydrogen cheaper to produce than fossil-based hydrogen, and hydrogen stocks hit record levels.

Just this month, Shell came to a decision on an electrolyser builder for its Hydrogen Holland I plant at the port of Rotterdam. The oil and gas multinational has signed a contract with Germany's thyssenkrupp for the construction of a 200MW electrolyser. Shell is expected to make a final investment decision on the plant this year and it would begin operations in 2024. The plant would be powered by an offshore wind farm and the green hydrogen it produces transported by pipeline to Shell's refinery in Pernis, south of Rotterdam.

Securing enough renewable electricity remains one of the biggest challenges for green hydrogen. The Netherlands has been slow to reach its renewable energy targets. Renewables account for only 11.47% of the country’s total final consumption against the backdrop of a 30% target for 2030.

As for electricity, 41% was supplied by renewable sources in 2020 against the backdrop of a 37% target. While solar experienced the biggest capacity change in terms of megawatts – 3,036MW was added in 2020 – wind was second with 2,116MW of capacity added. Offshore wind is set to play a big role in the country's renewables expansion, as The Hague increased its offshore wind target in November 2021 from 11.5GW to 22.2GW of operating offshore wind capacity by 2030.

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