HYDROGEN POLICY: Portugal announces support scheme for renewable hydrogen
LONDON(ICIS)–On 4 January the Portuguese government announced it was tendering for the supply of renewable hydrogen and biomethane, aiming to replace natural gas with renewable gases.
The tender process aims to support natural gas suppliers with enough renewable hydrogen or biomethane to replace 1% of natural gas by volume for parties whose supply to final customers exceeds 2,000GWh/year.
ICIS data shows that Portuguese gas demand totalled around 60TWh in 2022, which would result in energy demand of 600GWh/year to replace 1% with biomethane or renewable hydrogen.
TERMS OF PURCHASE SYSTEM
The tendering process outlined by the Portuguese government stated that it was aiming to establish 120GWh/year of renewable hydrogen and 150GWh/year of biomethane, offering a maximum subsidy of €127/MWh for hydrogen and €62/MWh for biomethane.
Contracts are expected to be valid for 10 years.
As a condition of contracting, producers will have to obtain the authorisation to connect to the gas transmission system. This could mean that producers of hydrogen would not need hydrogen storage, as production could feed straight into the gas network, reducing overall project costs.
The purchasing mechanism – although listing “renewable hydrogen” – did not specify particular conditions for the production of the hydrogen other than stating that the hydrogen was produced using renewable electricity and electrolysis.
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