Will Private Funding Match New 11GW Hydrogen Ambitions?
As Spain released an updated draft of its Energy and Climate Plan, which revealed plans to increase green hydrogen production threefold, Hydrogen Industry Leaders highlights how the country could achieve 11GW by 2030.
Updating the National Integrated Energy and Climate Plan 2021-2030, Spain announced ambitious plans to decrease annual emissions by 32% by 2030. This is an increase from initial plans to carve out 23% of emissions from annual recordings.
At the heart of delivering these ambitions, increasing the uptake of green hydrogen production is at the top of the agenda for the Spanish Government. This agenda includes the delivery of 11GW of installed electrolysers for this green hydrogen production.
Increasing the capacity from 4GW the updated draft action plan will see an increase in wind and solar generation, specifically for hydrogen production ensuring issues around additionality are limited.
Wind generation will be increased to 62GW, photovoltaic solar to 76GW, and power storage capacity could see a total of 22GW by 2030.
Private funding expected to deliver the new ambition
Balancing public and private sector funding has always been a hot topic, with most discourse exploring the distribution is close to 50/50 private and public funding.
Showcasing the ambitions and banking on private sector incentivisation, of the $321bn, the draft has indicated that over 80% of the funding is expected to come from the private sector. EU funding will provide just over 10% of the funds with the rest coming from the Spanish Government.
Spain’s government aims to strengthen the country’s industrial value chain and strategic autonomy while generating more than half a million job opportunities. This announcement comes shortly before the upcoming Spanish general election, where energy has become a contentious topic.
Over the past few months, Spain has been prominently involved in European hydrogen production. In January, Prime Minister Sánchez approved €74 million in initial subsidies for four green hydrogen projects, followed by an additional €100 million for seven projects in June.
Cepsa, the country’s energy company, is swiftly advancing its plans to establish 2GW of renewable hydrogen production, having signed numerous offtake agreements. Recently, they also disclosed intentions to create a hydrogen maritime corridor between Algeciras, Spain, and Rotterdam, Netherlands, in collaboration with Yara Clean Ammonia.
Spanish hydrogen will bring all parts of the nation together
The push for green hydrogen is not limited to Cepsa, as bp, the oil, and gas giant, has expressed ambitions to develop a 2GW green hydrogen cluster in Valencia. Additionally, the Port of Bilboa has partnered with the Port of Rotterdam and other entities to build a hydrogen corridor connecting the two locations.
Iberdrola, ACE Terminal, and Gasunie have also signed Letters of Intent (LoIs) to establish a green hydrogen value chain between Spain and Holland. In terms of infrastructure development, pipelines play a pivotal role in Spain’s 2023 plans. Germany has joined the H2Med project, which intends to transport hydrogen produced in Spain and Portugal to central Europe.
This pipeline is projected to carry approximately two million tonnes of hydrogen annually, accounting for 10% of the continent’s hydrogen consumption. These goals align with the REPowerEU objectives of producing 10 million tonnes of hydrogen domestically and an additional 10 million tonnes by 2030.