The Dutch government will provide €450mn ($514mn) in subsidies for a hydrogen storage project at Zuidwending, in the country's north, to be developed by state-owned transmission system operator (TSO) Gasunie.
The HyStock project will consist of four storage caverns, each with 6,000t of capacity, that will be developed in phases. Gasunie plans for the first cavern to be ready for operations in 2031.
Zuidwending was selected for its existing underground gas storage infrastructure and its suitability for connection to the Netherlands' planned hydrogen backbone, the government said.
The government said its support is intended to mitigate risks that would be difficult for a "typical investor" to bear alone. These include uncertainty over the cost of so-called cushion gas, which must remain permanently in the facility to enable injections and withdrawals, the possibility of low utilisation rates during the market's early years, and potential project delays linked to permitting procedures.
The subsidy does not constitute an "operating guarantee", nor does it account for covering market risks and cost overruns, the government said, and Gasunie will be responsible for executing the project.
Hydrogen storage infrastructure will be required even during the initial stages of market development, the government said. Storage facilities are needed to help balance temporary mismatches between supply and demand, to strengthen security of supply, and to increase flexibility in the wider energy system.
The subsidy award adds to a series of Dutch government measures aimed at supporting the hydrogen sector. it has already provided substantial financial support for low-carbon hydrogen production projects and has proposed a demand-side subsidy scheme to help stimulate hydrogen consumption.
