This article was originally published on 4 June 2021
LONDON (ICIS)--A widely traded hydrogen market could come into place in the Netherlands by 2027, according to the conclusions of a hydrogen exchange definition study that were released earlier this week.
The Hydrogen Exchange Initiative, or “HyXchange”, was funded by Dutch grid operator Gasunie and four Dutch port authorities - Amsterdam, Rotterdam, Groningen and North Sea Port - with an aim to explore the practical aspects of how a hydrogen exchange could be founded.
“There will be a growing demand for climate-neutral hydrogen, generated by a multitude of sources, creating the necessity for a market to optimise supply and demand as well as transparent pricing,” according to the HyXchange study summary document.
FORMATION OF A TRADED MARKET
The HyXchange definition study outlined that key to a widely traded hydrogen market was the need for infrastructure, enabling the commodity to be transported between regions of supply and demand.
The Netherlands is well placed for such a hydrogen network, with projections from Gasunie outlining that a hydrogen network could be ready by 2027 following the initial construction of hydrogen infrastructure from 2024 in the Rotterdam-Rijnmond region, according to information from the European Hydrogen Backbone.
Prior to this, hydrogen could be traded regionally, the study states, for example at industrial clusters where large quantities of blue hydrogen is produced, such as in Rotterdam through the H-Vision project, or at locations set to benefit from offshore wind for the generation of green hydrogen.
Imported hydrogen could also support regional trade.
The study notes that such a variety of hydrogen streams (green, blue and imported) would need to be certified under a market system, qualifying the source of such hydrogen and therefore determining its economic value.
This would enable hydrogen from different sources to enter into one market, rather than different markets for different sources.
The study concludes that four product types could be established based on market participant feedback:
- A certificate product, to be developed ahead of infrastructure and used to trace the source and value of a hydrogen stream.
- An index product, also ahead of infrastructure development, which could be used prior to the establishment of regional spot trade or wider national/international trade. An index price could accompany a certificate product, adding value to the different type of hydrogen as a reference point.
- A spot market product, which could come into place as local regions of supply and demand develop, expanding out as the national hydrogen backbone of the Netherlands is built.
- Products for grid balancing and storage