Junta de Extremadura, Enagas sign renewable hydrogen infrastructure deal

LONDON (ICIS)–The Junta de Extremadura and Spanish transmission system operator Enagas have agreed to foster the development and promotion of renewable hydrogen and its derivatives within the region.

The deal will have the objective of developing renewable natural gas infrastructure, specifically renewable hydrogen, for the transport and storage of renewable hydrogen and its derivatives within the Extremadura region, located in southwest Spain on the border with Portugal.

Guillermo Fernandez Vara, president of the Junta de Extremadura, said that there will be €10bn of investment in the objective.

The region of Extremadura has set a goal of producing 20% of all renewable hydrogen produced in Spain by 2030, with the development of 3GW of electrolysis out of a country-wide total of 16GW within the region.

Extremadura already produces more than 20% of Spain’s solar power, one of the technologies able to provide electricity for the electrolyser market to produce renewable hydrogen.

Enagas also said that the acceleration of the development of renewable hydrogen was from a combination of the decarbonisation process as well as the security problems surrounding energy supply following the Russian military invasion of Ukraine and the European Union’s aim to cease all reliance on Russian fossil fuels by 2027.

A total of 420km of hydrogen pipelines will be required, with the main node located in Almendralejo and a branch heading towards the industrial centre located at Puertollano.

Spain has large aspirations to become a key contributor of renewable hydrogen in the coming years, with high renewable resource potential as well as expectation of renewable hydrogen being delivered into the country from North Africa.

Moreover, data from ICIS showed that hydrogen production costs in Spain were at a discount to other countries located in northwest Europe, with hydrogen production costs for projects starting in 2025 using a renewable power purchase agreement (PPA) supplying power from Spanish solar farms at €5.22/kg on 17 January in comparison to €7.81/kg in the Netherlands and €9.16/kg in Germany.