The Groningen gas field provokes bittersweet feelings among the citizens of the north-eastern Netherlands. Europe’s largest gas field of its kind, it created thousands of jobs and supplied the whole country with energy for years.
It still does – however, its fortunes faltered after the area began to experience quakes. The emptying of the rock basin containing the gas field caused the ground to sink after every tremor, and triggered local discontent as properties became damaged. Dutch authorities have ordered a gradual decommissioning of the gas field.
However, now they are betting on another gas to reboot the regional economy: hydrogen.
A new economy
“Authorities started envisioning a hydrogen economy some eight years ago, when many municipalities converted their vehicle fleet to hydrogen, and companies started to work on things such as hydrogen vehicles and filling stations,” Max Holthausen, managing director of Hyzon Motors Europe, tells fDi Magazine. “Many projects sprang up, and that gave us a head start over other countries.”
After pioneering some vehicle and hydrogen stations projects, Mr Holthausen teamed up with his technology supplier, Singapore-based Horizon Fuel Cells, and its US-based vehicle spin-off, Hyzon Motors, to manufacture hydrogen-powered trucks in Groningen. It planned an annual capacity of 2000 trucks to be reached within three years with a budgeted investment of €40m.
Mr Holthausen believes locating the new facility in Groningen makes sense on different levels. “Local authorities gave us a chance to stand at the point where we are at now. Now we want to place the factory here in Groningen as a way to give back and create local jobs,” he says.
Besides this, he adds: “We have schools that train people to be hydrogen engineers, universities working with the hydrogen economy, and a large number of people with the operational and practical side of it.”
Groningen also has a chance to prove the concept of ‘green’ hydrogen. Currently, most industrial hydrogen is still extracted from fossil fuels such as natural gas. Green hydrogen uses electricity to extract hydrogen and oxygen from water through electrolysis. Oil giant Shell, which operated the Groningen gas fields with Exxon for decades, has teamed up with Dutch gas company Gasunie to develop a 3–4 gigawatt (GW) wind farm off the Groningen coast by 2030, which will power a hydrogen production plant.
The province gained the backing of the European Union, which granted €20m to a project called Heavenn. Its main goal is to make Groningen a blueprint for a “hydrogen valley” able to install large-scale production of green hydrogen and distribute it through retrofitting existing natural gas pipelines, for industrial and mobility use.
Hydrogen fuel cells have been around for decades, but have struggled to take off due to costs and sparse infrastructure. The technology may now be approaching a turning point however.
The European Commission unveiled a green hydrogen strategy in July, setting the goal of 6GW of renewable electrolyser capacity by 2024, and 40GW by 2030. It expects cumulative investments in renewable hydrogen in Europe to reach between €180bn and €470bn by 2050.
Major developments are already happening on the ground. South Korean giant Hyundai is shipping its first hydrogen trucks to Europe, and the network of European hydrogen filling stations is growing, although it is currently concentrated in countries such as Germany and Denmark.
With this in mind, Mr Holthausen is setting the bar high. “We want to be a new original equipment manufacturer, and we will scale up as demand picks up,” he concludes.
This article first appeared in the August - September edition of fDi Magazine. View a digital edition of the magazine here.