Spain is positioning itself as a global leader in the renewable hydrogen sector, aiming to become the world’s first “hub” for this clean energy source.
The country’s government, energy groups, industrial companies, and administrations are collaborating to create a robust ecosystem that embraces the green hydrogen revolution. By harnessing the power of European funds and implementing generous aid programs, Spain is accelerating its energy transition and promoting research, development, production, and practical applications of green hydrogen.
The Spanish government, led by Pedro Sánchez, recognizes the potential of green hydrogen and its vital role in achieving carbon neutrality. It has already executed five aid programs, under the Recovery, Transformation, and Resilience Plan, to support green hydrogen projects. However, the demand for funding has far exceeded the planned budget, prompting the government to launch an additional aid package of 150 million euros. These efforts align with Spain’s commitment to utilize European funds to promote the growth of the renewable hydrogen sector.
To encourage innovative projects with commercial viability, the government has introduced the second edition of an incentive program for pioneering renewable hydrogen initiatives. The aim is to support projects that focus on local production and consumption of green hydrogen, particularly in sectors where electrification for decarbonization is challenging, such as heavy transport and certain industrial sectors. The first edition of the program received an overwhelming response, with 127 applications requesting subsidies totaling 746 million euros, more than five times the expected allocation. Notable recipients of subsidies include Iberdrola, EDP, Cepsa, Enagás Renovable, and Redexis, with grants ranging from 4 to 15 million euros for various projects.
The Ministry for Ecological Transition has distributed a total of 340 million euros in subsidies through the five grant programs initiated thus far. However, the calls for funding have attracted an avalanche of applications, with requests surpassing 1.1 billion euros, more than triple the allocated budget. While 63 projects have received funding, over 200 initiatives have applied for subsidies from the European funds of the Recovery Plan, necessitating a rigorous screening process.
Spain’s Ambitious Goals
Spain aims to capitalize on the anticipated growth of the renewable hydrogen industry. Energy groups are actively developing numerous green hydrogen production plants, while industrial sectors are exploring ways to adapt their processes and utilize hydrogen as fuel in various forms of transportation. The government is also establishing a network of large hydroduct corridors, both domestically and internationally, to facilitate the transportation of future energy.
Under the strategic project for economic recovery and transformation (PERTE), Spain has allocated significant European funds, initially amounting to 6.9 billion euros and later expanded to 7.9 billion euros. This funding, combined with private investment of up to 16 billion euros, aims to boost the role of green hydrogen in Spain’s energy revolution. A substantial portion of the public funds, around 1.55 billion euros, has been dedicated to renewable hydrogen projects, aiming to mobilize an additional 2.8 billion euros of private capital.
Spain is in the process of updating its National Integrated Energy and Climate Plan (PNIEC), which outlines the roadmap for decarbonization until 2030. The updated plan will establish the technologies to be used for electricity production in the next decade and will likely increase the targets for renewables, including green hydrogen. Spain currently aims to achieve a green hydrogen production capacity of 4 gigawatts by 2030, representing 10% of the European Union’s hydrogen strategy target for the entire continent.
New 150 Million Euro Call for Pioneering Renewable Hydrogen Projects
The Spanish Ministry of Ecological Transition has taken another major step toward becoming a renewable hydrogen leader. The government is promoting pioneering renewable hydrogen generation and consumption projects with commercial viability with a 150 million euro call for help. The first procurement, with a 150 million euro budget, awarded incentives to 19 projects in nine districts.
The initial tender benefited Cepsa, Edp, Repsol, Enagas, and Naturgy. The ministry-affiliated Institute for Energy Conservation and Diversification (IDAE) will again manage these grants for the upcoming call. Competitive grants will assist local hydrogen production, delivery, and use for commercial applications.
This call covers the renewable hydrogen value chain. These include green hydrogen production plants, distribution infrastructure, industrial use, and heavy transportation applications. The appeal welcomes new stationary applications in ports, airports, logistics platforms, and storage systems.
If the minimum investment barrier of one million euros is met, each project can receive 15 million euros. The Spanish Ministry of Ecological Transition funds pioneering projects to promote renewable hydrogen technology and application development nationwide.
Spain’s ambition of becoming a renewable hydrogen hub aligns with this new funding request. Hydrogen can help achieve carbon neutrality and boost economic growth, according to the country. Spain promotes local production and consumption to create a sustainable, self-sufficient hydrogen ecosystem that can benefit industry, transportation, and energy.
Renewable hydrogen is beneficial. First and foremost, it offers a clean alternative to fossil fuels. Green hydrogen uses renewable electricity to avoid carbon dioxide emissions. This helps fight climate change and reduce greenhouse gas emissions.
Renewable hydrogen can reduce fossil fuel imports and promote energy independence. Spain’s rich sun and wind resources make it ideal for large-scale renewable energy and hydrogen production. This might boost energy security and stability while fostering sustainable economic development.
Despite its enormous promise, renewable hydrogen has hurdles. Large-scale hydrogen generation and infrastructure construction are costly. To compete with conventional energy sources, water electrolyzers must be more efficient and last longer.
Creating a hydrogen infrastructure, including storage, transportation, and distribution networks, is logistically and technically difficult. Energy businesses, governments, and regulators must invest and collaborate. Safety rules and laws for hydrogen storage, handling, and transportation must also be developed.