Gasunie develops green hydrogen network in Netherlands

Gasunie has initiated the construction of a new network for green hydrogen, aimed at connecting major industrial areas in the Netherlands and Germany’s Ruhr region. This network, costing billions, seeks to supply the “new gas.” However, the production of green hydrogen still needs to be ramped up.

Both the government and companies see green hydrogen as crucial for the future of the chemical industry, as it can replace fossil fuels like natural gas and coal. Despite its potential, concerns remain about the economic viability of green hydrogen, currently much costlier than grey hydrogen produced from natural gas.

The construction of the hydrogen network is progressing slowly compared to the rapid development of the natural gas infrastructure in the 1960s. Willemien Terpstra, Gasunie’s CEO, emphasizes the need to speed up infrastructure development.

In Rotterdam, the first major hydrogen factory, operated by Shell, is under construction and aims to be linked to its largest refinery in Pernis by the end of the year. Currently, Shell uses grey hydrogen for refining fuel, but hopes to transition to green hydrogen as demand increases.

The costs involved in producing green hydrogen, which include sustainable electricity and expensive facilities, make it five times more expensive than grey hydrogen. Companies are waiting for government policies to mitigate investment risks.

Gasunie aims to resolve the supply-demand issue by providing a network that encourages both production and import, potentially reducing costs. Much electricity is required for green hydrogen production, and while surplus renewable electricity can be converted, electricity grid costs in the Netherlands remain higher than in neighboring countries like Germany and Belgium.

Some countries have advantageous conditions, contributing to their ability to produce excess renewable electricity and convert it into hydrogen for export. If companies are hesitant to transition to hydrogen, the network could become a relic of an unsuccessful energy transition.

Source: NOS

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