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Spanish government is set to spend nearly €900m on ten hydrogen projects in the coming weeks


Spanish government is set to spend nearly €900m on ten hydrogen projects in the coming weeks

Spanish Prime Minister Pedro Sánchez has announced that his government is set to spend nearly €900m ($968m) on ten hydrogen projects within weeks, as he vowed to make the nation “a global benchmark in decarbonisation from renewable hydrogen”.

Source: HydrogenInsight

The ten projects, located across Andalusia, Asturias, Aragon, Castilla-La Mancha, Murcia and the Basque Country, will include not only production, but transportation and technology development.

Spain has more widely budgeted €3.1bn for the green hydrogen sector - including electrolyser manufacturing, industrial end-use, and export to neighbouring countries - in its updated post-Covid recovery, transformation and resilience plan (PERTE).

Multiple energy companies had secured Important Project of Common European Interest (IPCEI) status from the EU on their developments in Spain more than a year ago, thus allowing the government to provide taxpayer money to private companies under EU state-aid rules.

But developers such as EDP have so far held off on final investment decisions for these projects as not only had funds failed to materialise, but a timeline for when the money would be forthcoming remained unclear.

Spanish oil giant Repsol meanwhile had frozen its planned hydrogen projects in the country as part of a wider threat to relocate its investment in response to a potential extension to Spain’s windfall tax on large energy firms.

However, Spain is expected to not only produce hydrogen at extremely low cost to decarbonise its own industries, but to transit cheap renewable H2 - both produced within its borders and piped in from North Africa - through pipelines to the rest of Europe.

Spanish gas transmission system operator Enagás, which is one of the companies planning the €2.5bn H2Med pipeline through Portugal, Spain, France and Germany, announced last week that its initial call for interest from companies saw up to 7.9 million tonnes of annual hydrogen production in Spain from all submitted projects with a start date by 2030, compared to only 1.4 million tonnes of domestic demand - demonstrating the need for large-scale H2 export.

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