How to get the hydrogen economy started
Jul 6, 2022
Speaking at the Louwman Museum in The Hague, Ben van Beurden, Shell Chief Executive Officer, sets out how Shell will help develop the hydrogen economy in the Netherlands.
It is wonderful you are all here today in the Louwman Automobile Museum. I cannot think of a better place to talk about our decision to go ahead with building the Holland Hydrogen 1 plant than in this monument of innovation and change.
Here, you can see the first “horseless carriages”, the world’s first car with a round steering wheel, and a hybrid car that can run 160km on one battery charge. That’s impressive for a hybrid car from 1896.
In short, this place shows what is possible when people continuously seek to improve.
The same goes for the Tweede Maasvlakte, where we are going to build our hydrogen plant. There, 2,000 acres of land were reclaimed from the North Sea. The boundaries of the Netherlands have been literally pushed there.
We should keep this in mind, since today the world is going through another period of great change that requires innovative thinking – as it needs to achieve net-zero emissions to tackle climate change.
This is a huge challenge. And we need to get the balance right. We cannot dismantle today’s fossil fuel energy system before the low-carbon energy system of the future is ready to take over.
Because cutting carbon emissions is crucial, but people also need a secure supply of affordable and reliable energy.
That being said, it is undeniably true the energy transition needs to accelerate. In my view, we can only achieve such an acceleration if governments, businesses and society work together.
This is why I am happy with the measures the Dutch government recently announced to speed up the energy transition. Like doubling the production of wind power in the North Sea to 21GW by 2030; mandatory solar panels on roofs of large buildings from 2025; and heat pumps from 2026 – to name a few examples.
Shell also plays its part in accelerating the energy transition. In fact, accelerating stands at the heart of Powering Progress, our strategy to transform Shell into a net-zero emissions energy business by 2050.
This means our future business plans will look different from those we have today, because if the world changes, if the energy system changes, Shell needs to change as well.
You can see this change happening here in the Netherlands. In 2020 and 2021, Shell took investment decisions for, in total, more than €4bn in the transition to net-zero emissions in the Netherlands, and we aim to maintain this pace of investments in the next years.
Obviously, this means many projects in renewable power. Because clean power from wind and solar will have to supply a much larger part of the world’s total energy demand.
This is why we are building wind parks in the North Sea and solar parks across the country. We are also growing our network of charging points for electric cars, at home, at the office, at hardware stores and at our filling stations. And we have started to supply renewable wind power to Dutch households.
This is all necessary, but just building more renewable power will not be enough. Because not everyone can buy an electric car immediately, and because there are parts of our economy that cannot easily use electricity yet.
Think of aviation, shipping, heavy-duty road transport, and industry such as chemicals. These sectors must all find their own specific ways to achieve net-zero emissions.
And I believe clean hydrogen can be a sustainable alternative in most. Indeed, clean hydrogen has great potential. It also has challenges.
Customers looking to use hydrogen made from renewables right now will have a hard time finding it. Infrastructure is lacking in most places. And those customers I just talked about are few in numbers.
So a lot needs to happen to help energy users switch from oil and gas to hydrogen. This is a challenge, but it is also a great opportunity. Because I firmly believe hydrogen will be an essential part of the energy system of the future.
And I’m not the only one who thinks this. In the recently presented National Energy System Plan, the Dutch government sees hydrogen as an essential element.
The EU calls hydrogen “a priority” for its Green Deal. And according to the IEA, the world needs to grow low-carbon hydrogen faster if it is to have a chance of reaching net-zero emissions by 2050.
This is why I want Shell to be in the lead when it comes to developing the hydrogen economy – in the Netherlands, and in the rest of the world.
And today is a big moment for this hydrogen economy. In two years, a 200MW electrolyser – by today’s standards Europe’s biggest – will produce some 60,000kg of hydrogen a day, made from renewable power from one of our offshore wind parks. At first, this hydrogen will go to our Energy and Chemicals Park.
In the meantime, we are working with many others in the Netherlands to further develop a hydrogen network for transport, specifically for buses and trucks.
We have already opened hydrogen filling points for buses in Groningen and Emmen. And at some of our service stations in Drenthe and Noord-Holland we have added filling points for hydrogen cars.
But this is just the very beginning. So much more would have to happen, of course. I just mentioned working together with others. This was no accident. Achieving net-zero emissions requires governments, businesses and society to join forces.
‘Our hydrogen plant contributes to the development of a sustainable industry in the Netherlands and can serve as an example for others across the world’
Because you cannot build a hydrogen economy on your own. More than 150 governments, organisations and businesses are involved in building this factory. Many are here, and in a minute, we are going to hear from our country chair, Marjan van Loon, who is at a supplier event with several others.
They are all convinced we need to take action now. And I am just as sure as they are that this region will benefit in three ways from our electrolyser.
To start, once built, the factory will offer 40 new permanent jobs. And building the facility will require between 300 and 400 temporary jobs – amounting to more than 1 million hours of hired professionals, from suppliers to mechanics and caterers. This means an economic impulse of €75m to €125m for the region.
Apart from this economic benefit, our hydrogen plant also contributes to the development of a sustainable industry in the Netherlands and can serve as an example for others across the world.
We are building the factory of the future. Architect Kraaijvanger’s design makes the building blend in with its surroundings, with as little strain on the environment as possible.
For example, we are going to use electric excavators, recyclable materials such as sustainable wood, eco-isolation and plant-based paint, and the exterior of the facility will have as many solar panels as possible.
All these innovations will teach us a lot. About finding the optimal way to deal with intermittent wind power. About building in the most sustainable way. And about having the right people do the right job.
That brings me to the third thing this project will contribute to the Netherlands. Working together with you. Because this project would not be possible without you.
I’m thinking of Mark Rutte’s government, that has made sure using low-carbon hydrogen in industry is now recognised as “green” just as it is for transport.
I’m thinking of the Port of Rotterdam that is helping with shared infrastructure in the port, and GasUnie with an essential hydrogen pipeline that can transport hydrogen over many kilometres.
And I’m thinking of the dozens of businesses involved in the construction of the site, from big to small, from international to local. Architect Kraaijvanger, contractors like De Reus, and companies such as ThyssenKrupp and the British machine builder Howden Thomassen.
This company has its roots in the family business of engineers, and nephews, Geurt and Frits Thomassen from Arnhem. Over 100 years ago, Shell bought one of their first custom-built engines. This was the beginning of a wonderful working relationship.
To give just a few examples, Thomassen supplied oil pumps for Schoonebeek, and compressors for gas extraction. In the years that followed the company innovated and grew. Today Thomassen has joined Howden and is a multinational.
They supply different smart machines to energy companies across the world, and even after a century, we still work together. Thomassen helps us build a factory for sustainable biofuels in the port of Rotterdam. And now, they will help us with the hydrogen plant.
And why I mention Howden Thomassen is just because they are a great example of the many long-term relationships with regional, national and international businesses that are going to help us start the hydrogen economy here.
Together, we are going to continuously improve and push boundaries. Like those 19th-century car builders, and the people who took thousands of acres of land from the North Sea.
This hydrogen plant will not achieve the energy transition on its own. But by creating new jobs, by showing sustainable industry is possible, and by building long-term relationships, it will help Shell and the Netherlands accelerate the energy transition and get closer to achieving their shared goal of net-zero emissions.
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