Spanish Valencia region set for further hydrogen boost on Enagas agreement
LONDON (ICIS)–The region of Valencia is set to see another boost for the development of a hydrogen economy within the region with the president of the Generalitat Valenciana, Ximo Puig, signing a general protocol of action with Enagas 13 March.
The agreement establishes collaboration to develop infrastructure in the Valencian Community for the transport and storage of renewable hydrogen, with the protocol part of the H2MED project.
The H2MED pipeline is set to move as much as 2 million tonnes/year of renewable hydrogen between Portugal, Spain, France, and Germany and is expected to become operational in 2030.
According to Enagas, the Valencian Community consumes 15% of total gas consumed in Spain and receives 17% of the total gas in the country.
BP REGIONAL PLANS
BP announced on 28 February that the company was set to launch a renewable hydrogen cluster in the region, HyVal, at its Castellon refinery where biofuel production would increase.
BP is set to develop 2GW of electrolyser capacity at Castellon, which is forecast to be completed by 2030.
Furthermore, BP said in a press release that biofuel production at the Castellon refinery would triple to 650,000 tonnes/year by the end of the decade with the hydrogen produced via electrolysis replacing its unabated hydrogen production currently located at the site.
The renewable hydrogen produced would be used as a feedstock in the biofuel production process, specifically for the production of sustainable aviation fuel (SAF), in addition to being used close to the site by the ceramic industry and the chemicals industry.
According to data from ICIS Power Horizon Forecast, Spanish hydrogen demand will come in at 20TWh in 2025 before increasing to 25TWh in 2030 and to 39TWh by 2040.
However, over the same time frame, supply is due to climb to 19TWh by 2025, 23TWh by 2030, and to 32TWh by 2040, with the gap between demand and supply set to increase in the coming years as a result.
Spain has ambitions of being a key exporter to other European countries with its large renewable resources and relatively low hydrogen demand forecasts (German hydrogen demand is forecast to be 88TWh by 2030 and France 31TWh).
Several projects have been announced in Spain so far in 2023, with Cepsa in February signed a deal with Fertiberia to boost renewable hydrogen production in Huelva as well as signing a memorandum of understanding (MoU) with ACE Terminal for the export of renewable ammonia from 2027, in addition to the Spanish and Dutch governments agreeing to cooperate more in the field of renewable hydrogen and hydrogen corridors.
ICIS data showed that Spanish renewable hydrogen produced from a 10-year PPA starting in 2025 was €5.38/kg for solar and €5.15/kg for onshore wind on 13 March, both comfortably lower than the German equivalents at €8.89/kg and €6.91/kg, respectively, lending itself to a potential export market.
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