Dutch datacentre growth stalls while hydrogen remains untapped
ING warns grid congestion threatens Dutch datacentre leadership, while the country’s championed hydrogen solution remains largely untapped
By
- Kim Loohuos
Published: 14 Nov 2025 15:45
A recent report from ING, one of the Netherlands’ largest banks, paints a stark picture for the Dutch datacentre sector.
Amsterdam, traditionally one of Europe’s five leading datacentre hubs alongside Frankfurt, London, Paris and Dublin, faces severe growth limitations.
Amsterdam’s city council recently announced that new datacentre applications will only be considered from 2035 onwards due to grid congestion.
According to ING, citing Gartner data, around 200MW of new capacity is currently under construction, but the realisation of a further 200MW appears increasingly unlikely.
The implications extend beyond Amsterdam. The ING report warns that “if there is no room for further growth of the datacentre sector in the Netherlands, we will lose knowledge and expertise over time, and with it, future economic growth”.
The sector currently supports between 150,000 and 250,000 jobs across the broader digital infrastructure industry, and contributes approximately €26bn in annual turnover.
The issue stems from multiple constraints, namely network congestion, limited physical space and growing public concern over energy consumption. Dutch datacentres currently account for 3.3% of the country’s total electricity consumption, a figure that could rise substantially with the expansion of generative artificial intelligence applications, which require significantly more processing power than traditional computing tasks.
International hydrogen race
While the Netherlands deliberates over capacity constraints, international players have made substantial progress with hydrogen fuel cell technology for datacentres. Microsoft has been particularly active, successfully completing multiple pilots.
In 2023, the company ran a 3MW hydrogen fuel cell system in Latham, New York – the first at a scale comparable to traditional diesel backup generators used in datacentres. The system, developed in collaboration with Plug Power, powered server racks for 48 consecutive hours, demonstrating the viability of hydrogen as a backup power source.
The significance of Microsoft’s 3MW achievement cannot be understated. As the company’s principal infrastructure engineer, Mark Monroe, noted at the time, “three megawatts is super interesting because that’s the size of the diesel generators that we use right now”.
This scale represents a genuine alternative to fossil fuel-based backup systems. Google has similarly been exploring hydrogen fuel cells as part of its goal to achieve 24/7 carbon-free energy by 2030. More recently, in February 2025, Microsoft launched a green hydrogen pilot project with Irish energy company ESB, marking the company’s first hydrogen deployment in Europe.
Against this international backdrop, the Netherlands presents a paradox. The country is viewed as a European hydrogen frontrunner, according to the International Energy Agency’s Northwest European hydrogen monitor 2024, which describes the Netherlands as “one of the most advanced countries with respect to hydrogen infrastructure development”.
Substantial government investment has gone into hydrogen production and transport – including a dedicated national hydrogen network of around 300km, the first in Europe converted from natural gas pipelines – yet datacentre applications of this technology remain minimal. So far, only one notable example has made it beyond the pilot stage.
Already in 2022, NorthC Datacenters installed Europe’s first hydrogen-powered backup system at its Groningen facility – a 500KW fuel cell module eliminating approximately 78 tonnes of CO₂ emissions annually. Yet, three years later, the initiative remains an outlier. While the company continues to cite hydrogen as part of its 2030 sustainability strategy, no additional Dutch datacentres have followed suit.
The Dutch Data Center Association has consistently advocated for prioritising hydrogen infrastructure for heavy industry – which accounts for the majority of Dutch CO₂ emissions – before extending it to datacentres.
However, this cautious approach contrasts sharply with international momentum. According to the Data centre dynamics report, Plug Power – Microsoft’s hydrogen partner – anticipates sales to the datacentre sector will increase in late 2025, with the company already engaged with “three major datacentre operators” for initial deployments.
Infrastructure challenge
The reluctance to pursue hydrogen solutions for Dutch datacentres is due to infrastructure availability and cost. Green hydrogen production requires substantial renewable energy input, and distribution networks remain underdeveloped.
In February 2025, Dutch gas network operator Gasunie informed parliament that costs for the national hydrogen pipeline project had increased by more than 150%, from an original estimate of €1.5bn to €3.8bn.
Stijn Grove, managing director of the Dutch Data Center Association, emphasised to Data Centre Dynamics the critical role of government support. “I think it can go really fast if they want it to,” he said. “We switched, in the Netherlands, from coal to natural gas in the ’50s, and that whole network was built in just four years. It is possible if there is a will. It depends on the will of the government to push this through.”
Cost remains another significant barrier. Hydrogen fuel cells are more expensive than traditional diesel generators. However, with rising fuel prices and the continuing development of the hydrogen sector – particularly in regions like Groningen, where NorthC operates – costs are expected to decrease. The fuel cells also offer a substantially longer lifespan of 20 years or more compared with conventional generators.
The IEA report underscores that less than 4% of announced low-emission hydrogen projects in Northwest Europe have reached a final investment decision, signalling the gap between ambition and implementation. Still, the Netherlands is highlighted as one of four countries – alongside Germany, Denmark and the UK – expected to account for three-quarters of the region’s low-emission hydrogen production by 2030.
The economic calculation becomes more complex when considering the ING report’s findings. The report suggests that Dutch datacentre workloads could technically run abroad, in locations like Scandinavia, where cooler climates reduce cooling energy requirements. However, this approach would result in the loss of technical knowledge and expertise that the report identifies as crucial for future economic growth.
Policy disconnect
The ING report proposes strategic solutions for datacentre growth, including locating facilities near offshore wind farms and utilising waste heat for district heating. These suggestions align closely with the capabilities that hydrogen infrastructure could enable. Hydrogen can be produced when renewable energy generation exceeds demand and stored for later use, addressing the intermittency challenges that the report identifies with wind and solar power.
The report notes that the Dutch government aims to have 21GW of offshore wind capacity by 2032. If datacentres could be positioned where this renewable energy comes ashore, powered by hydrogen systems that store excess generation, and their waste heat repurposed for heating, the sustainability equation would shift substantially. Yet the report makes no mention of hydrogen as part of the solution.
This omission is particularly striking given the Netherlands’ stated ambitions as a hydrogen leader. The potential convergence between the country’s two strategic sectors – datacentres and hydrogen – remains largely theoretical.
This omission stands out given the Netherlands’ explicit role in European hydrogen policy. The IEA Monitor describes the country as a “key player in Northwest Europe’s hydrogen trade ambitions”, with Rotterdam and Amsterdam identified as central import hubs for renewable hydrogen and ammonia by 2030.
Critical juncture
The technical feasibility of hydrogen-powered datacentres has been demonstrated. Microsoft’s pilots show the technology works at commercial scale. NorthC proves 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 increased national and European coordination on datacentre development. If that coordination is to be meaningful, it will need to address not just where datacentres can be built, but how they can be powered sustainably at scale. Hydrogen technology offers a potential answer – one that numerous international operators are actively pursuing.
For now, the Netherlands’ position as both a digital and hydrogen frontrunner remains aspirational. As the IEA cautions, meeting the 2030 targets will require “concentrated and immediate action by all stakeholders” to close the gap between policy ambition and concrete investment.
Whether the Netherlands will leverage its hydrogen expertise and infrastructure investments to retain its datacentre sector’s competitiveness remains an open question. The window for action, however, appears to be narrowing as other European markets develop both hydrogen capabilities and datacentre capacity simultaneously.
For Dutch policymakers, the choice may soon be between supporting a convergence of two strategic sectors or watching both opportunities migrate elsewhere.
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