Spain to Launch New $2.5 bln Plan to Support Green Hydrogen, Renewable Industry

by Emma Pinedo and Pietro Lombardi (Reuters) Spanish Prime Minister Pedro Sanchez on Wednesday (July 17, 2024) announced a new plan worth 2.3 billion euros ($2.5 billion) to boost the country's transition to clean energy, including subsidies for green energy industries and hydrogen made from renewable power.

The plan will also include measures to help agriculture, infrastructure and villages transition to green energy, Sanchez said in an address to the lower house.

Earlier this month, Madrid approved a 794 million euro package of subsidies for large green hydrogen projects in the country with a potential overall electrolysis capacity of 652 megawatts.

Subsidies are vital for green hydrogen projects due to high costs and are not competitive without public support.

Spain's draft climate strategy a 2030 target of 11 gigawatts (GW) for electrolysers, up from a previous 4 GW.

Excerpt from Montel News: The European Commission (EC) has granted approval for Spain’s plans to provide state aid totalling EUR 1.2bn for large-scale green hydrogen projects to boost the country’s energy transition. -- The scheme will support investments in the production of renewable hydrogen with an installed capacity of at least 100 MW, the EU executive said in a statement on Friday.

Subsidised projects may include production of renewable fuels derived from hydrogen, storage of renewable hydrogen and production of renewable electricity.

However, the eligibility of aid requires the projects to have signed deals with offtakers for at least 60% of the clean production expected.

“This EUR 1.2bn plan will allow Spain to accelerate the deployment of renewable hydrogen capacities, in line with the EU Hydrogen Strategy and the European Green Deal,” said the EC’s executive vice president for competition policy, Margrethe Vestager.

“The plan will also help Spain reduce its dependence on imported fossil fuels, while minimizing any potential distortion of competition,” she added.

Spain aims to have 4 GW of green hydrogen production capacity installed by 2030, while the 27-nation EU bloc has set an initial goal of 10m tonnes of domestic renewable hydrogen production and another 10m tonnes of imports by 2030. READ MORE

Excerpt from Reuters: Spain has increased its target for green hydrogen production capacity in a sign of confidence in an industry that has seen some energy giants scale back plans due to high costs and uncertain demand.

The update of the government's strategy set a 2030 target of 12 gigawatts (GW) for electrolysers used to make green hydrogen, up from 11 GW in a draft update presented last year, according to an energy ministry document published on Monday (September 23, 2024).

The government is expected to approve an updated national energy and climate plan, which includes the new goal, at a cabinet meeting on Tuesday.

The plan is a key roadmap for companies looking to invest, as it establishes targets for energy efficiency and renewables, among others.

Spain is vying to be a European leader in green hydrogen - which means the gas is produced using renewable electricity - by taking advantage of its bountiful sunshine and wind to produce clean energy.

It has recently approved subsidies for large projects in the country and is attracting interest from big investors, like Chinese electrolyser manufacturer Hygreen Energy and China's Envision Group.

By contrast, some of the largest energy companies in the region have cut targets or scrapped projects tied to low carbon hydrogen, highlighting the challenges faced by an industry that depends heavily on subsidies. READ MORE