Spain Advances Towards Hydrogen Leadership With Major Investments And Green Energy Projects Targeting 2030 Goals – Report

Spain is already a leader in green energy within Europe, with over 50% of its electricity generated from renewable sources like wind and solar. Now, the country is focusing on using this renewable potential to develop a strong hydrogen industry. Research from Rystad Energy shows that Spain could reach around 5 GW of installed electrolyzer capacity by 2030. However, the national target is 11 GW, which is the highest in the European Union. To meet this goal, Spain will need additional support from its government’s subsidy programs. Germany, which has set a target of 10 GW by 2030, is projected to reach 4.5 GW according to the same analysis.

Spain’s favorable conditions for renewable energy and strong policies make it one of the most cost-effective regions for producing green hydrogen. While the global hydrogen market has not yet lived up to initial high expectations, Spain’s outlook remains promising. The Puertollano green hydrogen plant in Spain, with a capacity of 20 megawatts (MW), is one of the few operational projects worldwide. Experts believe that Spain’s green hydrogen production could increase significantly by 2030, with most projects considered low-risk due to solid government support. This backing is evident in BP’s recent decision to invest in the first 25-MW phase of the Castellón refinery hydrogen plant, which could grow to 2 GW of electrolysis capacity by 2035.

The European Hydrogen Bank (EHB) has recognized the advantages of Spain’s hydrogen sector, awarding subsidies to three major Spanish projects through a pilot auction. This auction attracted 130 bids from across Europe, with 46 coming from Spain. Spain’s hydrogen industry will also benefit from a €794 million state aid package provided by the EU’s IPCEI Hy2Use program. This aid supports hydrogen-related infrastructure, including large electrolyzers and transport networks for low-carbon hydrogen production, storage, and distribution. Additionally, the Spanish government recently announced a €2.3 billion subsidy program, with €1.2 billion going toward developing renewable hydrogen hubs and €750 million to strengthen the green technology supply chain.

Despite its strong position in Europe’s hydrogen market, Spain has yet to outline specific plans for generating domestic demand for hydrogen. In contrast, Germany has set ambitious targets for both production and consumption, ranking second in production capacity. Spain, with its better renewable energy conditions, may focus on becoming a net exporter of hydrogen, especially to countries like Germany, which faces challenges due to less favorable conditions.

In the EHB auction, the bids for renewable hydrogen ranged from €0.37 to €0.48 per kilogram. The Spanish projects submitted the lowest average production costs, benefiting from the country’s lower renewable energy costs. One successful project, DH2 Energy’s Hysencia, will have 35 MW of electrolyzer capacity and bid €0.48 per kilogram for 17,000 tonnes of hydrogen over 10 years, requesting €8.1 million in funding. The project, located in Argon, recently received an environmental permit and will include 49 MW of solar capacity.

Another winning project was Benbros Energy’s El Alamillo H2, which has 60 MW of capacity and bid at €0.38 per kilogram. It requested €24.6 million for 65,000 tonnes of hydrogen over 10 years. The estimated cost of production for this project is €5.80 per kilogram.

The final successful project was Renato PtX’s Project Catalina, with 500 MW of electrolyzer capacity at €0.48 per kilogram for 480,000 tonnes of hydrogen over 10 years. The project will use 1.1 GW of combined solar and wind power, connected to a green ammonia plant by a 221-kilometer hydrogen pipeline. The estimated cost of hydrogen production for this project is €4.61 per kilogram.

Spain’s government has also launched a €1.2 billion funding initiative to support large-scale green hydrogen projects. To qualify, applicants must meet various criteria, including producing hydrogen from renewable sources and committing to selling at least 60% of their hydrogen output.