Spain wants to become the first hub of renewable hydrogen of the world. The energy groups are preparing dozens of projects for green hydrogen production plants – which use electricity from renewable energies for their generation – and the Government is promoting a network of large corridors of both internal and international hydroducts to transport future energy.
Green hydrogen is called to be one of the next energy revolutions in a few years, with the aim of replacing natural gas with a green gas without emissions in economic sectors that have difficulties electrifying their processes. The energy sector is preparing for this and the Administrations are also working on it. But it remains to be seen and tested whether the boom that is predicted is such.
and with that goal Spain prepares a first major check to test real interest that the energy companies have for producing hydrogen and the big industry for consuming it. Enagás, the manager of the Spanish gas system and operator of the gas pipeline network, intends to launch the first hydrogen supply and demand matching mechanisms in the country throughout 2023, according to the documentation sent by the group to the CNMV on the occasion of the presentation of its annual results last week.
In this way, Enagás tries to make a market test on how they would match the consumption of hydrogen that the industrial groups intend to do and the production expected by the energy companies. Initially, the mechanisms that the company intends to activate would be non-binding and will not be working until the second half of the year.
The Enagás plan involves setting up a sort of test bench to carry out the first major survey of the real interest of large industry in using green hydrogen, with a test of the expected demand to gather useful information to end up sizing the infrastructures necessary to produce and to transport hydrogen in the future.
In principle, the intention is to wait until the Government has updated the National Integrated Energy and Climate Plan (PNIEC), which includes the planning of how it will be distributed among the different electricity production technologies until 2030 and that the Ministry for Transition Ecological must review and modify as required by the European Commission.
Enagás’s intention, as recognized by its CEO, Arturo Gonzalo Aizpiri, is to invite large distributors to participate in this new matching mechanism that already operate gas networks. The company will therefore seek to add to this initiative companies such as Nedgia (Naturgy), Redexis, Nortegas, Extremadura Gas or Madrileña de Gas, among other. “We would like to involve the gas distributors in Spain. They must participate in this joint effort”, indicated the executive.
H2 backbone
Enagás has spent years working on the design of the so-called Spanish backbone of hydrogen, which contemplates the construction of large internal transport corridors and also international connections. Its expansion and development are planned, as the production and demand for green hydrogen grow, which does not produce CO2 emissions as it is obtained with electricity from renewable energies only.
Spain, France and Portugal have agreed to promote the first major hydrogen corridor in the European Union and have subsequently also joined Germany in the initiative. A pharaonic project, called H2Med and with planned investments of almost 2,500 million euros, which aims to be key to prop up the renewable hydrogen revolution to gradually replace natural gas in economic sectors that have difficult or impossible electrification.
The original plan agreed between Madrid, Paris and Lisbon was to unite the three countries with a corridor with two sections that are expected to be operational between 2028 and 2030. One section will link Spain with Portugal (between Celorico da Beira and Zamora, with an investment of 350 million) and the other with France (between Barcelona and Marseille, with an underwater tube that will cost 2,135 million). After also adding Berlin, the tube network will extend across French soil until it reaches Germany and the intention is to end up deploying it to other countries in northern and central Europe.
Spain, France and Portugal have presented the H2Med candidacy to the European Commission to obtain European funds that finance between 30 and 50% of the planned investment. But Spain has also submitted the petition alone for the recognition as projects of common interest to the EU construction of two large internal green hydrogen transport corridors.
It is a great corridor that will unite Huelva, Puertollano (Ciudad Real), Zamora and Gijón and another that will connect Gijón, Barcelona and Cartagena. In addition, the Executive is also seeking EU funding to build two underground storage facilities for hydrogen in saline cavities in Cantabria and the Basque Country. Enagás calculates that investments of 4,670 million euros will be necessary for the internal facilities.
Pending the update of the PNIEC, Spain currently aspires to achieve a green hydrogen production capacity of 4 gigawatts (GW) from now to 2030, which would mean keeping 10% of the target set so far by the European Union in its hydrogen strategy for the entire continent.