Shell Nederland and Dutch energy company Eneco have confirmed they entered last week’s Dutch offshore wind tender as part of a joint effort to create a record-breaking hydrogen cluster in the Netherlands.

The tender closed last week, with Ørsted confirming to GTM that hydrogen also formed part of its bid for the 700+ megawatt tender.

On Thursday, Shell and Eneco confirmed that they submitted a bid through their new joint venture CrossWind, which plans to develop 759 megawatts of capacity in the Hollandse Kust (noord) zone feeding a 200-megawatt electrolyzer. The hydrogen will be used by a Shell refinery.

“The energy transition calls for guts, boldness, and action,” Marjan van Loon, president-director of Shell Nederland, said in a statement. “Through the connection of this wind farm to our possible future green hydrogen plant in the Port of Rotterdam, we want to develop a new value chain together with our partners and governments — from wind to hydrogen — to create a green hydrogen hub.”

In February, Shell, Dutch gas grid operator Gasunie and the Port of Groningen launched the NortH2 consortium. New partners are invited to join during the one-year feasibility study. They hope to develop a “European Hydrogen Valley” cluster. The plan requires 3 to 4 gigawatts offshore wind capacity, rising to 10 gigawatts by 2040 — all dedicated to the production of green hydrogen.

If Shell and Eneco win the new Dutch tender, the commitment to build a 759-megawatt offshore wind farm would be considerably larger than a feasibility study. Dutch authorities have until the end of July to announce the winners.

"This would be a record-breaker in terms of the output of hydrogen and size of the electrolyzers," said Ben Gallagher, an analyst at Wood Mackenzie. "One of the key demand pools for green hydrogen is refineries. That an oil major is making these concrete steps is an excellent sign."

The 200-megawatt electrolyzer would produce as much as 60,000 kilograms of hydrogen per day. Shell intends to use the hydrogen at one of its refineries to decarbonize the production of fuels. 

Gallagher said that the level of detail into the plans presented on Thursday, as well as its scale, gives additional confidence that the proposals are solid.

At the end of 2019, there were only 294 megawatts of green hydrogen electrolyzers deployed globally, according to figures from Wood Mackenzie.

Shell ramped up its own decarbonization plans last month. The oil major is targeting net-zero status across its own operations by 2050 and a 65 percent reduction in those of its products. It expects customers to use efficiencies, carbon capture, offsets and other measures in order to take care of the final 35 percent.

Dutch hydrogen plans gather steam

Looking to get a leg up on other European countries, the Dutch government published a hydrogen strategy last month. The plans include close integration with the country's busy ports and industrial clusters.

The Netherlands has a highly congested electricity network. The government views hydrogen as a cheaper method of landing renewable energy from offshore wind farms than an overhaul of the grid. A trial is planned this year to conduct electrolysis offshore and deliver the hydrogen to land.

The Netherlands has a dense concentration of natural-gas pipelines, with a sizable portion of North Sea gas destined for continental Europe landing there first. These pipelines could be repurposed for hydrogen transport, or the hydrogen could be blended into the natural gas and then combusted together.

The Port of Rotterdam has designated land for a 2-gigawatt energy conversion park at Tweede Maasvlakte. Shell plans to be the first customer on the site, with operations starting in 2023.

Allard Castelein, CEO of the Port of Rotterdam Authority, said Shell’s project would enable it to accelerate its plans to develop a dedicated hydrogen pipeline around its site. The port is almost twice the size of Manhattan.

It is also working with BP on a potential green hydrogen project.