Dutch datacentre growth stalls while hydrogen remains untapped

While the Netherlands debates capacity limits, international players have made significant progress in hydrogen fuel cell technology for data centers. Microsoft has been particularly active, successfully completing several pilot projects.

In 2023, the company launched a 3 MW hydrogen fuel cell system in Latham, New York – the first on a scale comparable to traditional diesel backup generators used in the US. datacenters. The system, developed in collaboration with Plug Power, provided power to server racks for 48 hours straight. demonstration the viability of hydrogen as a backup energy source.

The significance of Microsoft's 3 MW achievement cannot be understated. As the company's chief infrastructure engineerMark Monroe as noted at the time, “Three megawatts is very interesting because that’s the size of the diesel generators we use now.”

This scale represents A true alternative to fossil fuel based backup systems. Google is also exploring hydrogen fuel cells as part of its goal of providing 24/7 carbon-free energy by 2030. Most recently, in February 2025, Microsoft launched a green hydrogen pilot project with Irish energy company ESB, marking the first deployment of hydrogen technology in Europe.

Against this international backdrop, the Netherlands poses a paradox. The country is seen as a European leader in hydrogen, according to the International Energy Agency. Hydrogen monitor of North-West Europe, 2024which describes the Netherlands as “one of the most advanced countries in terms of developing hydrogen infrastructure.”

Significant government investment has been made in hydrogen production and transport, including a dedicated national hydrogen network of around 300 km, the first in Europe to be converted from gas pipelines. datacenter the use of this technology remains minimal. To date, only one notable example has made it beyond the pilot stage.

Already in 2022 NorthK Data Centers installed Europe's first hydrogen-powered backup system at its Groningen facility – a 500 kW fuel cell module eliminating approximately 78 tons CO₂ emissions annually. However, three years later the initiative remains ejection. Although the company continues to refer to hydrogen as part of its 2030 sustainability strategy, no one additional Dutch datacenters followed this example.

Dutch Data Center Association consistently advocated prioritization hydrogen infrastructure for heavy industry – which accounts for majority CO₂ emissions in Holland – before spreading them to data centers.

However, this cautious approach stands in stark contrast to international dynamics. According to Data Center Dynamics ReportPlug Power – Microsoft's Hydrogen Partner – foresees sales in data centers sector will grow at the end of 2025, as the company is already collaborating with “three major datacenter operators” for original deployment.

Infrastructure challenge

Stein Grove, Managing Director of Dutch Data Center Association, emphasized to the data center The dynamics of the decisive role of government support. “I think things can go very quickly if they want it to,” he said. “In the Netherlands we switched from coal to natural gas in the 50s and this whole network was built in just four years. It is possible if there is a will. It depends on the government's desire to make it happen.”

Expenses remains another significant barrier. Hydrogen fuel cells are more expensive than traditional diesel generators. However, with rising fuel prices and the continued development of the hydrogen sector – especially in regions such as Groningen, where NorthK works – cost reduction is expected. Fuel cells also offer significantly longer service life of 20 years or more compared to conventional generators.

The IEA report highlights that less than 4% of announced low-emission hydrogen projects in North West Europe have reached a final investment decision. signaling the gap between ambition and implementation. However, the Netherlands stands out as one of four countries – along with Germany, Denmark and the UK, which is expected to account for three quarters of the region's low-emission hydrogen production by 2030.

The economic calculations become more complex when the findings of the ING report are taken into account. The report states that the Dutch datacenter workloads can technically be carried out overseas, in places like Scandinavia, where cooler climates reduce the need for cooling energy. However, this approach will lead to loss of technical knowledge and expertise which the report identifies as critical to future economic growth.

Shutdown Policy

The ING report offers strategic solutions for datacenter growth, including locating facilities near offshore wind farms and using waste heat for district heating. These proposals are closely related to the opportunities that hydrogen infrastructure can provide. Hydrogen can be produced when renewable energy production exceeds demand and stored for later use, solving the intermittency problems that the report identifies with wind and solar power.

The report notes that the Dutch government aims to have 21 GW of offshore wind power capacity by 2032. datacenters If this renewable energy were to come onshore, powered by hydrogen systems that store excess generation and their waste heat redirected for heating, the sustainability equation would change significantly. However, the report does not mention hydrogen as part of the solution.

This omission is especially striking given Netherlands' declared its ambitions as a leader in the field of hydrogen energy. Potential convergence between the country's two strategic sectors – datacenters and hydrogen – remains mostly theoretical.

This omission is striking given the clear role of the Netherlands in European hydrogen policy. The IEA Monitor report calls the country “a key player in North West Europe's hydrogen trading ambitions.”“, by 2030, Rotterdam and Amsterdam will be identified as central import hubs for renewable hydrogen and ammonia.

Technical feasibility of a hydrogen engine datacenters was demonstrated. Microsoft's pilot projects show that the technology works on a commercial scale. NorthK proves that it can be implemented in the Netherlands. The question is no longer “can we?” but “will we?”

The ING report concludes with a call for greater national and European coordination on data centers development. For this coordination to be meaningful, it will have to be about more than just where datacenters can be built, but how can they be sustainably powered on a large scale. Hydrogen technology offers a potential answer – one that numerous international operators are actively involved in this.

The Netherlands' current position as a leader in digital and hydrogen technologies remains ambitious. Achieving the 2030 targets will require “concentrated efforts”, the IEA warns. and immediate action by all stakeholders” to close the gap between political ambitions and concrete investments.

Will the Netherlands use this is hydrogen expertise and infrastructure investments for hold his data centers sector competitiveness remains open question. However, the window for action appears to be narrowing as other European markets develop both hydrogen capacity and datacenter power at the same time.

Dutch policymakers may soon be faced with a choice between supporting the convergence of two strategic sectors or watching both opportunities migrate elsewhere.