Cabinet invests €450 million in the Netherlands’ first large-scale underground hydrogen storage facility
The Cabinet is making €450 million available for the construction of the Netherlands’ first large-scale underground hydrogen storage facility: the HyStock project in Zuidwending. With this, the Netherlands will have sufficient hydrogen storage capacity in time. Minister Van Veldhoven (Climate and Green Growth) is sending this decision to the House of Representatives today.
Importance of the investment
The Netherlands is committed to making the energy system more sustainable, while at the same time wanting to maintain a strong position as an energy and industrial country in Europe. Hydrogen plays a crucial role in this. For a well-functioning hydrogen chain, it is necessary that production, transport, use, and storage are developed simultaneously.
With this investment, the Cabinet prevents storage from becoming the weak link in the chain. It is a concrete step to increase security of energy supply and to prepare the Netherlands for a future with sustainable hydrogen.
A well-functioning hydrogen market depends on sufficient storage capacity. Storage deep underground makes it possible to keep hydrogen that is produced in abundance at peak moments available for times of scarcity. Without storage, production, transport, and offtake become unbalanced, making it difficult for the market to develop.
The realization of underground hydrogen storage also takes a long time: from initial plans to commissioning can easily take 10 to 15 years. Because the hydrogen market is still in an early phase, parties are currently not able or willing to bear these risks entirely on their own. That is why the Cabinet is supporting this development now.
HyStock in Zuidwending
In Zuidwending, four underground salt caverns will be constructed in which hydrogen can be stored. In addition, installations will be built to pump hydrogen into and out of the caverns. The location was chosen because of existing experience with underground gas storage and its good connection to the national hydrogen network.
Risks that are covered
The Cabinet’s contribution is aimed at three specific risks that a normal investor is not yet willing to bear, namely: the uncertain price of the so-called cushion gas, the risk that the storage will not be sufficiently filled in the first years, and possible delays due to permitting. So it is not a guarantee against cost overruns in construction or a free pass for business risks; HyStock remains responsible for proper execution of the project.
