Uniper Delays Rotterdam Hydrogen Plant Amid High Grid Fees, Lack of Offtake Certainty
04.16.2024 By Tank Terminals - NEWS

April 16, 2024 [S&P Global]- Uniper has pushed back the startup of the first 100-MW phase of its planned H2Maasvlakte green hydrogen plant in Rotterdam, the Netherlands, after failing to secure a power purchase agreement for the facility, and amid high grid fees and uncertainty over sufficient offtake interest.

 

Phase one is now expected to be completed in 2028, from a previously indicated start date of 2026, though the full 500 MW capacity is still scheduled to come online in 2030.

The company has also withdrawn from the EU Innovation Fund financing it had been granted, “because it did not foresee the possibility of meeting the original date communicated for ‘financial closure’ before August 2024,” a company spokesperson told S&P Global Commodity Insights by email April 14.

Part of the reason for this was being unable to secure a PPA, the spokesperson said.

One factor was the availability of affordable offshore wind to match the hydrogen production subsidy scheme timelines, meaning that if a project misses out on a wind park tender, a developer has to wait for the next wind farm to become available.

The company had previously signed letters of intent and memorandums of understanding with renewable energy producers bidding for the Hollandse Kust 6 and 7 (West) offshore wind farms.

RWE was awarded the 760-MW Hollandse Kust West 7 tender, while Shell and Eneco won 760-MW Hollandse Kust West 6, both due to start in 2026.

The next new Dutch offshore wind is expected to come online some years later, with the government currently tendering for the massive Ijmuiden Ver windfarm, totaling 4 GW, scheduled to come online in 2029-30.

Recent subsidy-free Dutch offshore wind permits have been awarded to companies that have included large-scale electrolyzer projects as part of their bids, with the award criteria heavily weighted in favor of projects that provided innovation to integrate offshore wind capacity into the Dutch energy system.

Grid fee inflation

Uniper also said grid fees in the Netherlands had risen 650% in the last six years and were still going up.

The company has suggested to the Dutch government that it explore exemptions for electrolyzers, citing a similar scheme in Germany.

Uniper said uncertainty of sufficient offtake interest had also stalled plans.

“The government is still in the process of implementing the [EU] REDIII [renewable energy directive] with its member state obligation for the use of green hydrogen and is still in the process of assigning offtake obligations to specific sectors,” the spokesperson said.

H2Maasvlakte was selected under the EC’s Important Project of Common European Interest Hy2Use group of projects in September 2022, which provides for up to Eur5.2 billion of state aid proposed by 13 EU member states across 39 projects.

However, Uniper said the company had no IPCEI subsidy in place for H2Maasvlakte from the Dutch government.

The company is exploring other subsidy schemes, and noted its Maasvlakte site was among the best locations for green hydrogen production in Northwest Europe.

“We remain committed to our goal and timeline but have updated the timeline due to market circumstances,” the spokesperson said.

In March 2023, Uniper selected US electrolyzer manufacturer Plug Power to supply its proton exchange membrane electrolyzers for the 100-MW plant. Plug is to deliver 10 PEM electrolyzer arrays once Uniper takes a final investment decision on the project, Uniper said at the time.

Platts, part of S&P Global Commodity Insights, assessed the cost of producing hydrogen via PEM electrolysis in Europe at Eur4.60/kg ($4.90/kg) on April 12 (Netherlands, including capex), based on month-ahead power prices, down from over Eur7/kg at the start of the year.

The Netherlands is targeting an installed electrolyzer capacity of 500 MW by 2025, and 3-4 GW by 2030.

 

Free Trial: Access 13,300 Tank Terminal and Production Facilities

13,300 tank storage and production facilities as per the date of this article. Click on the button and register to get instant access to actionable tank storage industry data

Axalta to Acquire the CoverFlexx Group, a Leading Aftermarket Coatings Business Focused on Economy Customers in North America
05.17.2024 - NEWS
May 17, 2024 [Axalta]- Axalta Coating Systems (NYSE: AXTA), a leading global coatings company, to... Read More
Airport Operator Groupe ADP Invests $20 Million in Sustainable Aviation Fuel Provider LanzaJet
05.17.2024 - NEWS
May 17, 2024 [ESG Today]- Sustainable aviation fuel (SAF) technology and production company Lanza... Read More
Nordsol and Prodeval Announce Groundbreaking Bio-LNG Production Facility in Portugal
05.17.2024 - NEWS
May 17, 2024 [Storage Terminals Magazine]- Nordsol, a pioneer in bio-LNG technology, and Prodeval... Read More
Dow Expands Propylene Glycol Capacity in Thailand
05.17.2024 - NEWS
May 17, 2024 [Dow]- Dow announced the start-up of its propylene glycol (PG) capacity expansion at... Read More