The future of hydrogen lies in Rotterdam. That’s because the Hydro Generation – a group of forerunners in the energy transition – see Rotterdam as the ultimate place to realise innovative solutions. This includes the innovative company Battolyser Systems, which developed a battery and electrolyser in one, the Battolyser®, and wants to scale up to a 1 gigawatt per year factory in the Merwe-Vierhaven. CEO Mattijs Slee talks to MEP Bart Groothuis about ambitions at both national and international level, and about what’s required from politicians in order to realise these.

Sustainable electrolyser technology

Battolyser Systems, currently still based in Schiedam, has attracted a great deal of international attention with its sustainable electrolyser technology. MEP Bart Groothuis is a member of the European Industry, Research and Energy Committee (ITRE) and former shadow rapporteur for the European Hydrogen Strategy Report. He’s very curious about the technology and has travelled to Rotterdam from Brussels.

Hydrogen-producing battery

CEO and engineer Mattijs Slee enthusiastically tells Groothuis all about how the unique Battolyser® technology works. “The Battolyser® charges like a normal battery when solar and wind energy are available and prices are low. The Battolyser® becomes an electrolyser and produces hydrogen once it’s fully charged. The hydrogen can subsequently be stored and used by industry or heavy transport.”

One major advantage associated with the Battolyser® is that the battery discharges and supplies power back to the grid when energy prices are high. This has made the Battolyser® a scalable solution for producing green hydrogen at lower costs and for storing green energy. The electrodes are made from class 2 nickel and iron: two cheap, widely available and recyclable materials. Groothuis is pleasantly surprised by what he’s seen and heard. “This is exactly what Europe needs. I’m incredibly impressed by what you’ve achieved here.”

“We have to move faster”

Slee certainly got high ambitions, as befits the Hydro Generation. “We want to move faster, in fact, we have to move faster if we want to become a serious contender in the battery and hydrogen industry,” according to Slee. “We’re learning as much as we can at the current 7,500 m2 location. This location allows us to produce up to 200 megawatts of Battolyser® stacks a year. But we’ll be scaling up at the new location in Rotterdam; we hope to be able to produce 1 gigawatt per year by 2026. That’s an absolutely insane task, especially when you look at what’s included in the Dutch Climate Agreement: an electrolysis capacity of probably around 8 gigawatts by 2030, while practically nothing is operational right now,” says Slee.

It’s abundantly clear that quick, concrete action is necessary if ‘net-zero’ is the goal. Slee: “You’ll then globally need 5,000 and 10,000 gigawatts of electrolysis capacity. I therefore see the electrolyser supply chain as a fantastic opportunity for the Netherlands to develop sustainable industries which can support our energy transition demand and which we can export right around the world. There’s definitely a revenue model in that.”

The Netherlands needs to seize the opportunity

Slee emphasises the importance of investing in the manufacturing industry right now, in order for the Netherlands to be able to seize this opportunity. “Your unit price can drop by 15 to 20% with every doubling of production numbers in this industry. If the Netherlands doesn’t react quickly enough, we’ll run a real risk of project developers opting for foreign technologies to realise their sustainability plans. We are of the opinion that these may well be cheaper, but would definitely be of lesser quality.”

The CEO is currently seeing this scenario unfold. “We’re in the process of helping to develop the German manufacturing industry, as the Dutch government subsidises hydrogen projects which have opted to use German electrolyser technologies. The current electrolysers are nowhere near good enough, but (indirect) subsidies have resulted in these soon having an industry in which we won’t be able to intervene.” Groothuis has seen the same thing happening elsewhere. Both France and Germany are European forerunners where their sustainable manufacturing industries are concerned: “Germany and France are together responsible for 74% of state aid in Europe and pursue an active industrial policy. The Netherlands needs to effectively educate itself and pull out all the stops. And be conscious of a situation where Germany works around the Netherlands. Just look at the hydrogen pipeline from Bremen to the south of Germany. They’re in full development.”

European hydrogen auction

There’s therefore certainly a very important role for the Netherlands, but also for Europe as a whole. Will the Netherlands be handed sufficient tools from Europe to turn the tide? “The European hydrogen strategy was introduced in July 2020. The focus within this strategy is on blue hydrogen, in order to realise the scale required to make green hydrogen profitable. Plus a large part of the hydrogen would be produced in Ukraine, in nuclear power plants. The strategy is therefore being called into question,” says Groothuis.

But, according to the MEP, Europe is working hard at establishing rules which should make it easier for countries and industry to accelerate the energy transition and reduce dependence on countries outside of Europe, like the Net-Zero Industry Act and the Critical Raw Materials Act. Trial sustainable hydrogen auctions will also be starting in the autumn of 2023, from the European Hydrogen Bank. In addition, the price per kilogram of sustainably produced hydrogen will also be compensated to competitive levels. “This will allow us to close the cost gap between renewable hydrogen and fossil fuels, which will undoubtedly help various start-up projects. Europe sees hydrogen as a no regret investment. An impressive 800 million euros from the Innovation Fund is therefore being invested in this European Hydrogen Bank pilot,” says Groothuis.

Everything’s negotiable

He’s of the opinion that Brussels is somewhat better at standardisations than business cases, but that entrepreneurs shouldn’t be put off by this. “Everything’s negotiable in politics. You shouldn’t stop involving administrators and presenting your ideas to them. There’s generally no restraint among politicians.” He’s also identified an active role for himself: “You should always act rather than question things in Brussels. Particularly if you want to be a forerunner and don’t want China or America to run off with production. Funds are needed, investments and trust are needed. I’m fully committed to that, for example with the Hydrogen Bank.” Groothuis wants to give his colleagues a wake-up call: “If you really want to lead the way, make sure you do so in terms of regulations too. Politicians should take on more of an entrepreneurial role here.”

The MEP is also of the opinion that the accelerated issuance of net-zero permits is receiving more attention in Brussels. “We’re by no means lowering the standards, but we are reducing the response time. For example, the permit is automatically approved if there’s no response within 3 months. This allows us to look for solutions within the legislation which will help to accelerate the transition.”

Venture capital is essential

Slee feels insufficiently supported by Europe and the Netherlands, despite the tightened response times and legislation. “I have to fight incredibly hard for our story, the Port of Rotterdam Authority has certainly seen that too. Of course the Municipality of Rotterdam’s SES subsidy is very nice, but that’s only a limited contribution. The development of the 1 gigawatt factory will minimally cost us 100 million. That’s why we’ve applied for 80 million from the Growth Fund together with partner companies. This is the only way we’ll be able to expand in Rotterdam and set up a new sustainable electrolyser manufacturing industry.”

The men are very aware of the fact there’s no venture capital investment culture in the Netherlands, unlike America. Even though they are in absolutely no doubt that venture capital is essential to allow companies of the future to commercially develop themselves. Groothuis says it’s all about the Netherlands’ ‘traditional restraint’. He feels the problem lies between the Netherlands’ ears and mindset. “We know this is both possible and necessary. And it’s so valuable for the Dutch economy with the accumulation of essential knowledge and plenty of employment opportunities.”

The Netherlands, and Rotterdam in particular, are ultimately suitable for the development of large-scale, sustainable industry. “Just look at the access to renewable energy, the existing infrastructure and the purchasing of hydrogen where it can instantly be put to use; that is truly unique in Europe and is exactly what we have available to us in the Netherlands. We simply have to make the best possible use of that! We need to work on a plan to make sustainable use of this,” Slee emphasises. Groothuis adds: “The Netherlands and Rotterdam are also very efficiently horizontally integrated. In other words, there are certainly plenty of different companies which can all provide high level contributions. They strengthen each other.”

Rotterdam: epicentre for hydrogen

The MEP feels Rotterdam has a great deal of potential where the battery industry is concerned and as a hydrogen hub. “Rotterdam is truly unique, because there’s so much here already. It’s the largest European cluster for the supply of imported hydrogen. It’s definitely the epicentre for hydrogen.” Slee has certainly also identified plenty of opportunities in the area. “The collaborations with partners are all going very well. We are fortunate enough to receive plenty of regional help and attention, for example when looking for a suitable location in the port.”

Slee very much feels part of the Hydro Generation and therefore also its intrinsic remit to change the industry in Europe and beyond. “We’re facing a huge challenge with Rotterdam, the Netherlands, Europe, but actually with the entire world. Our generation simply has to make a material impact. We have to be net-zero by the time I retire.”

Glass half full

Slee has a positive outlook on things, despite the obstacles he’s experienced with his company. “Ultimately there are definitely more opportunities than obstacles. The glass is half full, as the long-term earning opportunities are greater than the expense. We can make great strides with the right support and will from governments.” Groothuis nods to confirm his agreement. “Battolyser Systems perfectly links into Europe’s vision. We’ll stay in touch. You have a fantastic company.”

Rotterdam Europe’s Hydrogen Hub

To read more about Rotterdam as Europe’s Hydrogen Hub and the forerunners who make Rotterdam Europe’s Hydrogen Hub, go to Rotterdam Europe’s Hydrogen Hub.