Spain strengthens green hydrogen position

Cem Bektas

24-Nov-2020

LONDON (ICIS)–Spain’s ambition to leverage its vast renewable energy capacity to generate green hydrogen has come closer to reality in recent weeks as the Spanish government and utility Iberdrola have each outlined new plans to develop the zero-carbon commodity over the approaching three years.

Following the publication of Spain’s hydrogen roadmap on 7 October 2020, the country has erupted in new announcements of capacity and funding from both government and private enterprise.

IBERDROLA PUSHES FORWARD

The latest of these was from Iberdrola, already a leader in the push for large-scale green hydrogen production in Spain.

The Spanish utility announced on 18 November that it had signed a memorandum of understanding (MoU) with world-leading Norwegian electrolyser producer Nel in order to progress Spain’s electrolyser capacity.

Iberdrola also announced the formation of a new enterprise with Basque company Ingeteam under the name of Iberlyzer.

Iberlyzer’s focus is to become Spain’s first integrator of large-scale electrolyser plants and is expected to begin operations next year.

The company aims to integrate 200MW of electrolyser capacity at Fertiberia’s Palos de la Frontera plant in Spain by 2023.

If finished on time, this capacity could make up 33-75% of Spain’s national target for 2024 of 300-600MW.

The 200MW target by 2023 also plays into Iberdrola’s announcement to have 800MW of capacity installed by 2027, making up 20% of Spain’s total 2030 target of 4GW.

The 800MW of electrolyser project will be situated across two Fertiberia plants, Palos de la Frontera and Puertollano (Ciudad Real) and is expected to receive €1.8bn of investment.

A 20MW electrolyser is also due to come online in 2021 at Fertiberia’s Puertollano plant in partnership with Iberdrola. Once online this will be one of Europe’s largest electrolyser projects – a testament to the scale at which capacity needs to ramp up over the coming three-to-four years alone.

EUROPEAN FUNDING FOR SPANISH HYDROGEN

Alongside private investment from Iberdrola, the Spanish government is looking to allocate more than €1.5 billion from the European Recovery Fund to the development of renewable hydrogen by 2023, prime minister Pedro Sanchez said on 19 November.

In line with this announcement, the country’s ministry for ecological transition launched a call for interest to help identify and locate solvent renewable hydrogen projects in Spain, their impact on the entire value chain and industrial development among other topics.

IMPACT ON POWER PRICES

Due to the added demand for electricity due to electrolyser capacity expansion, power markets may see a boost in prices in the near term if renewable capacity is not sufficiently brought online to balance out the impact of this added demand.

SPANISH HYDROGEN ROADMAP

On 6 October, the Spanish government approved the hydrogen roadmap targeting 4GW of installed electrolysis power capacity by 2030.

The roadmap also sets an intermediate goal of installing 300-600MW of power from renewable hydrogen electrolysers by 2024, supporting the European Commission’s ambition for 6GW of capacity by the same year.

This will involve an estimated investment of around €8.9 billion to be mobilised by the private sector – with an efficient public sector support – until 2030.

The European funding is part of the European Commission, the European Parliament and EU leaders’ agreement on an economic recovery plan to lead the union out of the coronavirus crisis.

Interested agents/parties will have until 19 December 2020 to submit their arguments. Additional reporting by Cem Bektas

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