Results from the survey of interest concerning offshore hydrogen production

Survey of interest for the first demonstration project

This survey of interest mainly concerned the first offshore hydrogen demonstration project: an electrolyser with a capacity of around 30 to 50 megawatts. For this purpose, € 380 million in funding is available through the Climate Fund. This subsidy is intended to cover the entire rollout of the project.

Participants

The survey of interest was open to respondents from a range of roles, including commercial parties, research agencies, knowledge institutions, suppliers and collaborative partners, as well as other stakeholders who may seek to be involved in (or have an interest in) future developments in offshore hydrogen production.

We received a total of 56 responses. The group consisted of:

• 17 project developers
• 13 engineering parties
• 9 suppliers and operators
• 5 infrastructure parties
• 4 knowledge institutions
• 6 other parties 

Results

All the respondents expressed a desire to be involved with offshore hydrogen, either now or in the future. Among the 56 respondents, 41 parties expressed a wish to be actively involved, and 10 are yet to make a decision. Five parties have stated that they do not wish to be involved in Project 1.

A concise summary of the responses can be found below.

Do the learning objectives correspond to the requirements?

The majority of respondents confirmed that the proposed learning objectives are very much in line with their expectations. They suggested we make use of the lessons learned from onshore hydrogen projects as well. The respondents also specified new learning objectives, including:

• Blending hydrogen into natural gas pipelines;
• Laying hydrogen transport pipelines;
• Using residual heat generated by the electrolyser. 

How much hydrogen should the demonstration projects produce?

Respondents expressed differing views on what might be a realistic scale for the demonstration projects (in terms of capacity). The respondents’ views are greatly influenced by their backgrounds and experience. The submissions reveal no clear consensus on whether projects should be large scale (70-100 megawatts) or small scale (less than 30 megawatts). Project developers tend to favour smaller and medium-scale projects.

Details of the preferences and arguments are presented in the graph below:

Should production be centralised or decentralised?

The respondents felt it is too soon to say whether centralised (on a separate platform) or decentralised (at the turbine) hydrogen production is the better option. From a technological perspective, centralised production is more mature than decentralised alternatives. As a result, the respondents tended to show a slight preference for this option.

What's the best way to transport the hydrogen?

There is consensus among respondents that transporting hydrogen in its pure form is the way forward. Hence the preference among respondents for transporting hydrogen in its pure form in Project 1.

The respondents pointed out that blending hydrogen into a natural gas pipeline offers greater flexibility for bringing it onshore. If we were to adopt this approach, the cost disparity (between green hydrogen and natural gas) would have to be eliminated. There was universal agreement among respondents that the Ministry of Economic Affairs and Climate Policy (EZK) should coordinate hydrogen transport ahead of the first project.

What sort of subsidy is suitable?

With no clear preconditions in place for Project 1, respondents found it difficult to make reliable estimates of its capital expenditure (CAPEX) and operating expenditure (OPEX). There is consensus among the respondents that a tailored subsidy would be the right fit for Project 1.

The respondents identified the following key considerations for financing the demonstration:

• Factoring in the cost of transporting components and personnel (frequency);
• How does the cost of offshore hydrogen production compare to that of onshore production;
• The cost disparity between centralised and decentralised production;
• The benefits of combining solar and wind (plus wave) energy for hydrogen production, as opposed to using wind energy alone;
• Analysing the breakdown of CAPEX and OPEX;
• The project will need to comply with the RED III criteria. This offers a distinct advantage (a higher premium for green hydrogen) over hydrogen that does not comply with these criteria.

Which site is most suitable?

On the whole, respondents consider the Hollandse Kust region a good site. However, concerns were raised about the benefits for parties already operating in the region (license holders). The benefits of siting Project 1 near existing infrastructure were also highlighted. One frequently mentioned site is the customer connection on the TenneT platform in the Hollandse Kust (Noord) wind farm.

Various parties have suggested possible sites for the project, including locations near existing (depleted) gas fields, options that allow connection to empty gas pipelines, and sites with the potential to be connected to a wave farm (which is yet to be constructed).

The respondents specified that the site should be capable of meeting the RED III criteria. They agreed that the hydrogen generated from this project should be marketable as green hydrogen.

How to structure cooperation between the participating parties?

There are differing views concerning the merits of establishing a consortium of collaborating parties for what is, after all, a demonstration project. The following 2 options leave scope for several possible variations.

• A competitive tender in which a single consortium is chosen, comprising representatives from each step in the supply chain;
• A wide-ranging collaborative programme centred on research and demonstration, placing particular emphasis on the sharing of knowledge (such as a Joint Industry Project, in Dutch).

The strengths of option 1 largely reflect the weaknesses of option 2, and vice versa. Although option 1 may accelerate project implementation, it could come at the expense of comprehensive knowledge development. The broad collaborative nature of option 2 may reduce the consortium’s decisiveness, but it would considerably strengthen knowledge development and sharing.

When can the demonstration project be finalised?

The respondents agree that the 2027 target for Project 1 is not achievable. They view 2029 as a more realistic timeline for completion.