A hydrogen exchange, similar to electricity and gas exchanges, could act as a catalyst for a market for climate-neutral hydrogen, according to an exploratory study, “A Hydrogen Exchange for the Climate”, presented to Eric Wiebes, the Netherlands Minister of Economic Affairs and Climate Policy.
Commissioned by the Ministry and prepared by Bert den Ouden, former CEO of the Dutch Energy Exchange, the report shows that a hydrogen exchange would create a win-win situation for all parties involved.
As a result of the study, Gasunie and four Dutch port authorities are now arranging for a definition study to be carried out into the practical design of an exchange on which hydrogen can be traded freely.
A hydrogen exchange could be set up in stages and grow incrementally along with the formation of a market for climate-neutral hydrogen. The follow-up study that is currently being launched will also be headed by Bert den Ouden and will run for a maximum of one year.
Every day, we work with partners on developing the Dutch hydrogen supply chain because we have confidence in the opportunities that hydrogen presents, both in terms of climate targets and our economy. Our gas trading site TTF now houses Europe’s largest virtual market for natural gas. A hydrogen exchange could have the same catalytic effect on the market forces driving hydrogen.—Ulco Vermeulen, member of the Executive Board of Gasunie
It is important that we all pull together on this. Not only do we want to speed up the development of hydrogen in the Netherlands, we also want to make sure our country plays a pivotal role in the renewal of Northwestern Europe’s energy system.—CEO of Port of Rotterdam Authority, Allard Castelein, on behalf of the sea ports
The growing demand for climate-neutral hydrogen creates the necessity for the market to work properly and for transparent, efficient pricing. A hydrogen exchange will be able to facilitate both. For example, distribution within the market can be optimized because it will allow parties to trade with each other on a knowledgeable basis, while the development of the hydrogen market can be accelerated.
The exploratory report provides a vision of a gradual formation of a hydrogen exchange that grows along with the hydrogen market and the development of hydrogen networks. In terms of volatility and temporal dynamics, the hydrogen market is expected to be half-way between the electricity market and the gas market.
The Netherlands has a unique starting position due to its cost-efficient approach to sustainable energy, its location, which is perfect both for offshore wind and the landing of hydrogen imports, the role that Dutch industry plays in hydrogen, and the unique gas infrastructure that can be converted to transport hydrogen.
The Netherlands also has a track record when it comes to energy exchanges—as the designer of the system of market coupling in respect of the European electricity exchanges, and the creation of Europe’s leading gas market.
In the definition study that is now about to start, more extensive studies will be conducted into the practical aspects of how a hydrogen exchange could be set up in the Netherlands.
The port authorities of Rotterdam, Amsterdam, Groningen and North Sea Port (Vlissingen, Terneuzen and Ghent) are all engaged in hydrogen infrastructure plans for their industries and other new initiatives in their respective areas. For some time, Gasunie has been working on plans for a national infrastructure connecting all these points, and in particular to make the import and transit to Germany and Belgium possible, while making hydrogen accessible to even more parties, especially newcomers, medium-sized and smaller organizations.
As part of the Hyway27 project, the national government, Gasunie, TenneT and the Port of Rotterdam Authority are working alongside other parties to find out whether and under what conditions part of the gas grid can be used for the transport and distribution of hydrogen. The results of this study are expected in the first quarter of 2021.