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5 Empirical Research for Establishing the Potential of Renewable Hydrogen …
• In addition to the EU ETS (Emissions Trading Systems), a carbon floor price
is under discussion between the Dutch authorities and the industry.
• There is already a big hydrogen market where 800.000 tons of hydrogen are
produced yearly. Scale is key for reduction of costs.
• This hydrogen demand is concentrated on petrochemical clusters which are
closed to the landing points of offshore wind farms export cables.
The renewable hydrogen Dutch model has some limitations.
• The definition of the term “renewable hydrogen” is not officially established.
This has an impact on how the SDE + + (i.e. Dutch technology neutral subsidy
system) subsidies will be allocated.
• Forecast data models used as reference to design policies are based on an
electricity mix still dominated by fossil energy. This makes the business case
for renewable hydrogen not viable.
• The current policy framework for battery storage needs to be updated to unlock
the potential of storage technologies. Today a fee must be paid when electrons
are stored and then when the electrons are put back to the grid.
• The current (zero-subsidy bid) policy framework is not sustainable in the long
term for renewable energy projects developers and investors as they are fully
exposed to merchant risk. Uncertainty may reduce investments which may in
turn reduce development of renewable energy projects.
• The renewable hydrogen is not yet supported by a clear policy instrument. This
is however under discussion and should materialize in short term.
• The policy instruments for development of large renewable energy projects and
those developed for renewable hydrogen are still “decoupled”. However, the
Dutch authorities are seriously considering integrated tender systems. Intense
lobbying is currently undertaken by the renewable energy projects developers
to influence policy makers in implementing such integrated tender systems.
As the Dutch benchmark is established with the interviewee #10, the other interviews are used to evaluate how the APAC markets compare with the Dutch model,
arguably defined as the “best in class”.
Regarding policy instruments for the allocation of large renewable energy projects, the transition to a subsidy free auction system has not yet happened. Japan,
Korea, Taiwan, and Australia still have policy instruments providing substantial
subsidies for renewable energy project developers. The main reason is that the
maturity of the market is far off the practices that can be observed in Europe.
Developers and investors need confidence regarding the viability of their business
5 Empirical Research for Establishing the Potential of Renewable Hydrogen …
• In addition to the EU ETS (Emissions Trading Systems), a carbon floor price
is under discussion between the Dutch authorities and the industry.
• There is already a big hydrogen market where 800.000 tons of hydrogen are
produced yearly. Scale is key for reduction of costs.
• This hydrogen demand is concentrated on petrochemical clusters which are
closed to the landing points of offshore wind farms export cables.
The renewable hydrogen Dutch model has some limitations.
• The definition of the term “renewable hydrogen” is not officially established.
This has an impact on how the SDE + + (i.e. Dutch technology neutral subsidy
system) subsidies will be allocated.
• Forecast data models used as reference to design policies are based on an
electricity mix still dominated by fossil energy. This makes the business case
for renewable hydrogen not viable.
• The current policy framework for battery storage needs to be updated to unlock
the potential of storage technologies. Today a fee must be paid when electrons
are stored and then when the electrons are put back to the grid.
• The current (zero-subsidy bid) policy framework is not sustainable in the long
term for renewable energy projects developers and investors as they are fully
exposed to merchant risk. Uncertainty may reduce investments which may in
turn reduce development of renewable energy projects.
• The renewable hydrogen is not yet supported by a clear policy instrument. This
is however under discussion and should materialize in short term.
• The policy instruments for development of large renewable energy projects and
those developed for renewable hydrogen are still “decoupled”. However, the
Dutch authorities are seriously considering integrated tender systems. Intense
lobbying is currently undertaken by the renewable energy projects developers
to influence policy makers in implementing such integrated tender systems.
As the Dutch benchmark is established with the interviewee #10, the other interviews are used to evaluate how the APAC markets compare with the Dutch model,
arguably defined as the “best in class”.
Regarding policy instruments for the allocation of large renewable energy projects, the transition to a subsidy free auction system has not yet happened. Japan,
Korea, Taiwan, and Australia still have policy instruments providing substantial
subsidies for renewable energy project developers. The main reason is that the
maturity of the market is far off the practices that can be observed in Europe.
Developers and investors need confidence regarding the viability of their business