New financial model helps local hydrogen projects move forward

Many entrepreneurs, including glasshouse growers, see opportunities with hydrogen to make their energy supply and that of others more sustainable. In practice, however, it proves difficult to turn an idea into a profitable business case. A new financial model from Invest-NL helps to better calculate local hydrogen projects and to substantiate them effectively to financiers, thereby accelerating the step towards realization.

Local opportunities for hydrogen

An increasing number of entrepreneurs are looking for ways to make their energy supply more sustainable. Companies with their own solar generation, a significant heating demand, and sometimes heavy transport on the premises or plot are attractive locations for locally producing green hydrogen. The residual heat can be used directly locally or sold to customers. The horticultural sector is a good example of this, but the same logic also applies to other sectors with sustainable generation, heating demand, and potential hydrogen demand.

From financial challenge to clear business case

Nevertheless, the business case is complex because revenues originate from various sources, such as electricity, heat, and hydrogen. This makes it challenging for entrepreneurs to determine under which conditions a project becomes affordable and financeable.

To lower this barrier, Invest-NL developed an open-source financial model for decentralised electrolysis. The model – developed in collaboration with horticultural entrepreneurs and financiers – demonstrates how different combinations of solar power generation, grid connection, batteries, and electrolyzers perform financially. It consolidates the key assumptions and outcomes in an accessible way, providing a solid basis for discussions with financiers and potential customers.

A solid financial model is crucial for the successful realization of a hydrogen project. This model from Invest-NL stimulates innovation and contributes to the growth of the hydrogen sector.
Ronald Linthorst
Energy transition banker at Rabobank

Getting started with the calculation model

The financial model for decentralised electrolysis is freely available via the website of industry association NLHydrogen. Entrepreneurs, advisors, and financiers can download and use the model for their own projects.

Download the financial model

Hydrogen is a key pillar towards a climate-neutral energy system in 2050. That is why Invest-NL is committed to gaining experience with this technology now, among other things by helping entrepreneurs better calculate and finance their projects.

Want to learn more about the model and how it works? Download the PDF below for more information.