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Spain’s Enagas to spend $4.8 billion on hydrogen and decarbonisation projects

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Spain’s Enagas to spend $4.8 billion on hydrogen and decarbonisation projects

Spanish utility Enagas has rolled out an ambitious investment plan — based mainly on natural gas and hydrogen — in an attempt to anticipate the challenges arising from Europe’s new energy model. - UpstreamOnline

The strategic plan for 2022 to 2030 involves investing €4.76 billion (US$4.77 billion) to respond to Spanish demand for security of energy supply for Spain and to respond to demands for decarbonisation domestically and in the European Union, the company has signalled.

Presenting a strategic plan, Enagas chief executive Arturo Gonzalo said the utility's growth plans would be built on projects in its core businesses, mainly in Europe, and driven by the twin demands for security of supply and decarbonisation.

In the current complex energy policy and strategic context, Spain and Enagas can contribute decisively to these European objectives.

he stressed

In this, Gonzalo pointed out that “the integration of the European energy system through infrastructure is key” and stressed that an important lever will be hydrogen-ready infrastructure.

Enagas pointed to four pillars of growth: gas and hydrogen infrastructure; innovation, technology and digitalisation; international development; and green hydrogen and biomethane activities.

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Adapting infrastructure

Gas, hydrogen and related businesses are expected to require investments totalling €1.78 billion through 2030.

These investments include adapting natural gas infrastructure to handling a 3% hydrogen mix commissioning of the El Musel liquefied natural gas import plant and a Green Link project for biomethane connections to the grid, the company stated.

Enagas plans to invest €850 million in these natural gas and transitional infrastructure projects, including €470 million by 2026.

To help reduce reliance on Russian gas — as part of the EU’s REPowerEU policy — Enagas is earmarking investments in a third Pyrenees connection, a subsea gas pipeline linking Spain and Italy and a third interconnection with Portugal.

All these projects would also be designed to transport hydrogen, too.

Hydrogen in focus

According to the European Hydrogen Backbone initiative — supported by 31 European transmission system operators including Enagas — between 60% and 75% of the bloc’s natural gas infrastructure can be repurposed for the presence of hydrogen.

By 2030, Spain could supply 21 billion cubic metres per annum of hydrogen to Europe, representing 20% of the continent’s expected hydrogen production, according to Enagas.

Enagas plans to allocate €600 million to projects in the Mediterranean corridor, such as doubling the capacity of the Trans Adriatic Pipeline, and the development of infrastructure in Greece — through its affiliate Desfa — and in Albania under a recent agreement signed with the TSO Albgaz.

Its Renovable subsidiary plans to invest €205 million in 30 projects producing renewable hydrogen and decarbonisation, and €85 million on 20 projects to produce biomethane and promote waste management.

Enagas says it reduced its carbon dioxide emissions by 54% between 2014 and 2021 and has committed to achieving carbon neutrality by 2040.

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