Political authorities, enterprises, and employer and industry organizations all seem to be on the same page when it comes to hydrogen energy. The Executive has proposed European funding totaling 1,500 million euros (until 2023) to promote this productive area, as well as budget items dedicated to this goal that would help more than fifty businesses. In addition, until 2030, additional 8,900 million public-private resources will be mobilized -also with the Next Generation EU seal-, this time from the repository earmarked for digitalization. The Spanish Hydrogen Association (AeH2) has declared Spanish leadership in the domestic market for this energy source realistic due to the current investment climate and the national energy transformation strategy.
The vector of hydrogen as a renewable source will not only give renewables more weight in the national energy mix, but it will also allow its integration – that of clean energy – on a large scale and efficiently, it will distribute energy between sectors and regions, and it will decarbonize emission-intensive industries like transportation, manufacturing, electricity production, or construction, both in its infrastructure business and in that of buildings and business and manufacturing. They are linked in a way that affects their energy storage capacity over lengthy periods of time, allowing them to compensate for energy production and consumption imbalances. In other words, it gives the process and the national energy system more flexibility.
“Hydrogen is going to play a crucial role as a connector between the diverse assets,” says its president, Javier Brey, “since a vector that adjusts Spain to new types of energy generation is becoming increasingly required.” It will also support decarbonization, which will provide a once-in-a-lifetime opportunity to gamble on this worldwide reference technology, with which Spain might become the EU internal market’s leader in generation and distribution. “We must develop zero-emission solutions to mitigate the repercussions of climate change” and “to ensure the self-sufficiency of renewable hydrogen to produce higher national income,” according to the report. First and foremost, because, secondly, “We may become exporters to other nations and Europe’s renewable hydrogen center.”
The AeH2 claims to be a non-profit organization whose major goal is to promote and develop hydrogen technology as a renewable energy source, as well as the promotion and use of its industrial and commercial applications, for the benefit of both the environment and industry. The entity was founded in 2002 by a coalition of enterprises, governmental and private organizations, and individuals that shared the entity’s original interest.
In this regard, the post-Covid scenario has created excellent conditions for launching a country strategy centered on hydrogen’s influx into Spain’s energy mix. With a budget mobilization of 8,500 million euros over ten years, items in this decade’s budgets to consolidate its trajectory in the national productive system and European funds for sustainability -with 1,500 million until 2023- and digitization, with another check of 8,900 million directed to public-private cooperation projects Companies require appropriate legal clarity from Moncloa in order to consolidate their capital flows in this context. Because all of the Ibex-35 energy firms and the continuous market have made plans to expand using hydrogen as one of their clean sources, a unique legal framework is required.
The series of first sword pronouncements by the sector’s leading corporations has gone in that route. After announcing projects of 210 MW in hydrogen generated with biomethane in its refineries in Cartagena and Bilbao, Repsol’s president Antoni Brufau and CEO Josu Jon Imaz underline the company’s “competitive potential in prices.” While Iberdrola’s senior executive, Ignacio Sánchez Galán, argues that Spain “may become a European benchmark for green hydrogen” by investing 1,800 million euros until 2027 with Fertiberia for the construction of 800 MW, Or Francisco Reynés, president of Naturgy, who advocates for the creation of hydrogen certificates of origin and whose firm is working on projects in Meirama and La Roble with research efforts, in collaboration with EnergyLab or Edar Bens, to produce green hydrogen from sewage. Endesa’s CEO, Jose Boga, underlines that this form of energy “must be a complement to the electrical mix, not a rival.” And Antonio Llardén, the chairman of Enagás, said the company is working on a dozen business projects worth more than 1,500 million euros.
Following Germany
Angela Merkel issued the declaration of purpose at the end of her term. She mentioned hydrogen as a vital component of the energy mix during her presentation of the national energy transformation strategy. Berlin will set aside 7,000 million euros by 2030 for the production of 5 GW. With the stated goal of “bringing Europe’s greatest economy to the forefront of hydrogen technology.” Green is also preferred above blue, which is the most environmentally friendly, and gray, which does not trap CO2. And with the admission that it had to get it from liquefied natural gas. At least at first.
As a result, Germany and Spain have identified hydrogen as an inescapable ally in their efforts to decarbonize their economy. With the motivation that big Spanish energy firms already have technological-digital breakthroughs to increase and diversify their renewable energy sources since hydrogen has been completely integrated into their business strategy. To the point that all of them publicly speak of a once-in-a-lifetime chance to address the Industrial Revolution 4.0 from the orbit of energy in order to bring maximum relevance to sustainability and the battle against climate change.
With the help of entities within the Spanish financial system as well. CaixaBank, for example, has just joined the European Clean Hydrogen Alliance, a European Commission-led effort aimed at boosting clean hydrogen technology. According to the bank, this is in keeping with its sustainability policy and commitment to zero emissions by 2050, which will need the development of financing lines for green hydrogen projects that aid in the worldwide decarbonization transition.
This official and business catapult are emphasized by the National Hydrogen Center (CNH2), an institution that has been dedicated to the hydrogen and fuel cell sector since 2007, covering the entire value chain of the so-called “hydrogen economy,” from its production and storage to its transformation and use both as an industrial raw material and as an energy vector. “It is the primary axis of our reason for being and, as a public R&D body of the State Administration, the focus of our strategy,” explains Emilio Nieto, director of the Puertollano-based firm (Ciudad Real).
On a national level, the country developed a national roadmap in October 2022, with very clear and challenging commitments, in which CNH2 will play a critical role, as it is one of the road map’s transition energy measures; more specifically, as a key player in the development of the hydrogen economy. Indeed, “it gives me the sensation that we have come just in time to catch the train of this industrial revolution and that we will not miss the opportunity to locate ourselves and settle in the locomotive” of events. According to him, “The commitment of all relevant actors in the sector to its growth through public-private partnerships is apparent, leading us to believe that our nation will play an important role in the development of hydrogen in the European and global order.”
This administration’s support, as well as the arrival of European funds to develop the decarbonization energy transition, is the tipping point that has caused this upheaval in the sector, where investment resources are drawn to these Future technologies, which will undoubtedly yield numerous business opportunities that they do not want to miss. Because hydrogen hubs encompass the full value chain, various components of the chain may be integrated, from renewables through production and storage, and finally to transformation and application in a variety of industries.
Given that the expenses of gas, as well as another factor, emission rights, have led its price to skyrocket, gray hydrogen is currently the majority (96 percent of global production). While blue appears as a transition element for progressively transforming the industrial sector toward clean processes without emissions, green is the preferred and only option for achieving zero emissions while meeting climate goals. “ It is amid this context that nations like ours, with our vast renewable energy capability, must seize the initiative and establish themselves as a leading producer and exporter of renewable or green hydrogen.
In terms of Spain’s alternatives for competing with Germany, Nieto emphasizes the relevance of the “political shift that has occurred in this transition.” Because none of the intermediate methods (blue, natural gas, or nuclear) are now green, even when compared to fossil fuels while emitting far less CO2. If we want to achieve zero emissions, though, “only electrification will allow it.” The Nordics, with their considerable supply of excess renewable energy, and Germany, with its extensive history in this field, are the most active EU partners in the hydrogen sector. “However, options such as Italy, France, Portugal, Spain, Holland, and others that have developed can win the day,” he says. “Each nation contributes what it can inside the value chain, boosting its virtues and possibilities,” each country says.
“In the future years, the shift to green, as well as intermediate options like blue, will steadily rise.” The target of zero-emissions has been set for 2050, which “I regard as extremely impossible to achieve and will undoubtedly be postponed,” according to the author. However, this does not imply that “many forecasts” exist, since everything will hinge on private sector participation in the creation of decarbonized solutions. Also, both in terms of rules and help, from the one that comes from the public sector. “In terms of green hydrogen production capability for internal consumption and surpluses for export, Spain has a significant edge over Germany.” The reason Nieto does not see that competitiveness is a concern is because the cost will be the primary limiting factor. “Our market has enviable geographical coordinates, as well as an efficient and full fabric and value chain; in contrast to Germany, which requires green hydrogen for its operations and must import it from countries like Spain, Chile, and Saudi Arabia, among others,” he explains.
The 8,500 million euros granted by the Spanish government “are, as they often appear, insufficient, but they are not negligible,” according to the CNH2. Above all, because of the formal commitment. 72GW of hydrogen production was suggested based on the expressions of interest obtained by the ministry during its initial phase (502 applications in total), much above the Spanish challenge of installing 4GW in 2030, or 10% of the 40GW defined in Europe. This strategy and integrating projects necessitate a significant expenditure and, of course, a higher figure than the one supplied. However, it should be remembered that businesses must raise their own funding, resulting in public-private partnerships that are “vital” to addressing the hydrogen crisis. The Administration, for its part, must support this deployment while also regulating and legislating by making the field more efficient and reducing bureaucracy as well as permits and licenses, but “Companies must transform these processes into more sustainable and emission-free ones in order to compete in a globalized, highly volatile, and competitive market.” As a result, European funds provide a chance to attain this goal and make this change. In fact, Nieto underlines that “the sectors who do not do so will be left out of the game.” European finances provide a chance to accomplish this goal and make this change. In fact, Nieto underlines that “the sectors who do not do so will be left out of the game.” European finances provide a chance to accomplish this goal and make this change. In fact, Nieto underlines that “the sectors who do not do so will be left out of the game.”
“Initially, the approach has concentrated on the supply sector,” says the CNH2 director, “but the demand must be stimulated in tandem so that both magnitudes go hand in hand.” Because not enough green hydrogen to utilize is just as horrible as having “too much and having to store it.” “Programs to stimulate supply and demand must be developed,” according to the director of the National Hydrogen Center, “and the projects must be inclusive and of sufficient size to force the appearance of their own economies of scale,” which will allow for cost optimization and viability as soon as possible. “It is already cheaper to manufacture green hydrogen than gray hydrogen,” Nieto argues, citing current natural gas and carbon pricing.
Repsol “The Spanish energy business was a pioneer in its field by setting the ambitious aim of reaching net-zero emissions by 2050 in December 2019,” according to corporate sources. To do so, it has the 2021-2025 Strategic Plan, a plan that includes transforming its industrial complexes to produce products with a low, zero, or even negative carbon impact as a cornerstone “.. Repsol employs various sorts of waste and frying oils as alternative raw materials to make biofuels or products with a low carbon impact, a paradigm shift that “is already taking place and in which technology and creativity play a crucial role.” “The items that civilization needs every day, such as construction materials, are made using carbon.”
Hydrogen is also required for the manufacture of these goods. That is why Repsol has the infrastructure to manufacture 360,000 tons per year in its complexes, which accounts for over 60% of national demand. As a result, Repsol sees renewable hydrogen as a strategic pillar that “will be critical in reaching its sustainability goals.” The Hispanic multinational unveiled its renewable hydrogen plan in October 2021, expressing its desire to lead the Spanish market and play a significant role in Europe. Through previously stated expenditures of 2,549 million euros in different initiatives across its value chain, until 2030, when it aims to install a production capacity of 1.9 GW. Furthermore,
Repsol’s hydrogen plan is in accordance with Fit for 55, the European regulation package that establishes minimum limits for the use of renewable hydrogen, as well as the Spanish government’s Hydrogen Roadmap, which was announced in 2020. As a result, Repsol’s efforts “will be focused on contributing to the national renewable hydrogen targets,” which are set at a 4 GW electrolyzer capacity by 2030.
“We are sure that Spain is in a fortunate position compared to other nations to exploit the potential offered by the new renewable hydrogen economy,” said the same sources at Repsol. On the one hand, because of the abundance of solar and wind resources, and on the other, because of the industry’s capacity to adapt to a new economy centered on the hydrogen value chain. The corporation claims to be “conscious” of the issue and is supporting major national and regional efforts, including the country project, based on its own capabilities as an industrial multi-energy company with an extensive understanding of hydrogen, its market, and its uses. SHYNE, Spain’s “biggest cooperation” for promoting renewable hydrogen, was unveiled on January 19.
Sara Aagesen, the Secretary of State for Energy, spoke at the occasion, stating that “renewable hydrogen is a country initiative and the missing piece of the jigsaw to move towards a decarbonized economy.” Similarly, Ral Blanco, the Secretary of State for Industry and SMEs, stated that “Spain has a unique chance and all the potential to lead Europe’s hydrogen industrial value chain.” He went on to say that one of the best examples is the SHYNE project. ” SHYNE is made up of 33 firms with a total investment of 3,230 million euros, which will be used to create more competitive technologies and move both Spanish industry and infrastructure toward decarbonization, resulting in the creation of over 13,000 employment.
Furthermore, SHYNE will be “the ecosystem that unites the significant regional hydrogen projects that have already been implemented,” such as the Basque Hydrogen Corridor (BH2C), the Catalan Hydrogen Valley, and the Murcia Hydrogen Valley. In Castilla-La Mancha and Madrid, two new innovation centers will be established to launch competitive technologies that are still in development, such as photoelectrocatalysis and solid oxide electrolysis (SOEC).
“European and national grants are a vital component both for technology and for the start-up of the incipient renewable hydrogen market,” Repsol says because they promote new projects and help the renewable gas become more competitive. “We cannot overlook the fact that the present cost of producing renewable hydrogen is nearly treble that of conventional hydrogen,” says the corporation, despite its unwavering commitment to the energy shift. Yes, “with criteria of inclusive transition, cost-effectiveness, and speed as soon as feasible.” “All of the technology and all of the assistance, both governmental and private,” says the report.
Although, in order to attract investors to this sort of project, a stable and suitable regulatory environment for the development of capital-intensive ventures is also necessary. Similarly, Repsol emphasizes that the processes that must be followed in the Administrations must be streamlined so that “all of these efforts that we are implementing may contribute in time to the objectives outlined in the Hydrogen Roadmap.”
Enagas is a kind of Greek mythology. According to the 2021-2026 Strategic Update, the Spanish gas firm is actively engaging in the development of the green hydrogen market, with initiatives in all aspects of its value chain. Enagás, in particular, works with more than 60 partners to support 55 renewable gas and decarbonization projects in Spain (34 green hydrogen projects and 21 biomethane projects).
Hydrogen Molecules (preferred). Green hydrogen is portrayed as an emission-free energy vector, an alternative to the use of fossil fuels, as part of the worldwide process of economic decarbonization. Enagás is a part of this bigger green hydrogen ambition. Electrification will satisfy 52 percent of Spain’s final energy consumption in 2050, according to the “2050 Long-Term Decarbonization Strategy” authorized by the government at the end of 2020; the balance will be met by renewable fuels, mostly green hydrogen.
The importance of ESG standards in the hydrogen industry
Enagás has made a strong commitment to decarbonization, setting a target of carbon neutrality by 2040. In the period 2014-2020, the corporation has already decreased emissions by 63 percent. According to the most recent edition of the Dow Jones Sustainability Index (DJSI), the corporation is the world leader in its category, among other accolades. Similarly, it achieved the highest ESG score in Spain to date from S&P Global Ratings, as well as the highest score in the CDP Climate Change rating. The company’s strong commitment to carbon neutrality, the establishment of aggressive emission reduction objectives, and the development of hydrogen and other renewable gases are reflected in these outcomes.
Hydrogen will be critical to the total decarbonization of all energy sectors (industrial, mobility, domestic-commercial, and power production) at the lowest possible cost, particularly in those applications where electrification is not a technologically or economically feasible choice. According to the European Hydrogen Backbone (EHB) research, Central European nations would need to import considerable amounts of hydrogen from surplus EU areas or adjacent countries, utilizing existing natural gas infrastructures, in order to tackle decarbonization. Spain might position itself as a hydrogen exporting country to the rest of Europe, thanks to its enormous solar and wind resources.
Green hydrogen is an important energy vector for the EU’s decarbonization. Renewable hydrogen will be able to provide flexibility and firmness to the whole energy system in the future when power generation originates from intermittent and non-manageable resources (solar and wind). Existing natural gas infrastructure networks may be used to transport and store green hydrogen.
Naturgy Without forgetting its roots and over 175 years of history, Naturgy’s vision for the future aims to transform the current business model and lay the foundations for continuing to create value through the energy transition, betting on renewable energies, developing renewable gas (hydrogen and biomethane), and promoting energy efficiency and the circular economy, according to sources from the energy firm. The importance of hydrogen development in the company is such that the company’s 2021-2025 Strategic Plan prioritizes renewables (60 percent of the 14,000 million euros allocated for the period), which includes renewable gases, primarily hydrogen and biogas, which are seen as opportunities in this transition scenario.
The Spanish multinational is concentrating on the creation of green hydrogen, which is created from renewable power using water electrolysis and can be stored in current gas networks. In Spain, the gas system has the potential to store the equivalent of the country’s energy usage for two months, according to these same sources. They note that this option “avoids the consumption of materials, energy, and waste associated with batteries, and unlike batteries, provides energy storage for lengthy durations, to accommodate seasonal changes in energy demand at the national level.” Several studies have shown that green hydrogen can be pumped into gas networks up to a maximum of 20-30% of their capacity, according to Naturgy.
Green hydrogen is one of the key drivers of decarbonization in the energy industry at both the national and European levels, despite its low penetration as a renewable energy vector. According to projections, the global demand for hydrogen, which is now about 60 million tons, might climb by 60% to 120 percent in the next decade. According to statistics collected as of February 2021, Spain has the biggest hydrogen production potential in Europe, with a capacity of over 3,000 TWh per year, due to its geographical and meteorological qualities.
“At Naturgy, we believe that the development of these projects necessitates public-private collaboration, through public aid that enables us to comply with the Hydrogen Roadmap published by the Ministry for the Ecological Transition and the Demographic Challenge and facilitate the development of the hydrogen industry in Spain,” they explain. In addition, the Naturgy Foundation recently released research titled An Efficient Decarbonization in Costs. According to the Florence School of Regulation, the EU must prioritize massive support for hydrogen R&D in order to reduce costs and avoid excessive subsidies for production, because the faster costs can be reduced by funding research and demonstration projects, the fewer subsidies for production are required. Furthermore, this sectoral diagnostic backs up the European Commission’s Hydrogen Strategy, which emphasizes the utilization of existing gas infrastructure as the most cost-effective approach to develop a future hydrogen distribution network.
