The Government Authorises Enagás to Start Work on H2Med, the Spanish Hydrogen Network and Associated Storage Facilities

(Enagás) - The Council of Ministers today (July 30, 2024) approved the agreement authorising Enagás Infraestructuras de Hidrógeno to provisionally exercise the functions of developing European Projects of Common Interest (PCI) for hydrogen networks. - These functions are the application for authorisation, construction, commissioning, operation, monitoring and maintenance of the hydrogen transport and storage infrastructures recognised as PCIs.

Following the approval of the Council of Ministers held today, Enagás will start the formal process for the granting of authorisations for European Projects of Common Interest (PCI), in accordance with Regulation (EU) 2022/869 and the Manual of Procedures for the Authorisation of Energy PCIs in Spain, published by the Ministry for Ecological Transition and the Demographic Challenge (MITECO) in October 2023.

The authorisation of Enagás Infraestructuras de Hidrógeno to provisionally exercise the functions for development of the European Projects of Common Interest for hydrogen networks is a fundamental milestone. These functions include the application for authorisation, construction, commissioning, operation, monitoring and maintenance of the hydrogen networks recognised as European PCI - H2Med, the Spanish hydrogen network and the two associated underground storage facilities.

In its 2022-2030 Strategic Plan, Enagás prioritised the development of hydrogen infrastructures as a key axis to contribute to the security of supply and decarbonisation of Spain and Europe. Since then, the company has been successfully implementing the Plan and has made significant progress - in the corporate, financial and technical fields - to take on this responsibility.

On the corporate front, Enagás created the subsidiary Enagás Infraestructuras de Hidrógeno in April 2022. In this way, the company has separated its functions as natural gas infrastructure operator (TSO) from those of hydrogen, in compliance with national and European legislation, plans and roadmaps.

Financially, the company has strengthened its balance sheet and is in a solid position to face the new growth cycle of green hydrogen in Spain and Europe. In this regard, it has adjusted its dividend policy and made progress in asset rotation, with milestones such as yesterday's completion of the sale of its stake in the US company Tallgrass Energy.

On the technical side, Enagás launched the Hydrogen Technology Observatory in April to promote the technical progress of renewable hydrogen, as part of the Enagás H2Technical Day, a forum where experts agreed that the development of large-scale renewable hydrogen is technologically feasible.

On April 8, the European Commission included in its final list of Projects of Common Interest the first axes of the Spanish hydrogen network, with two underground hydrogen storage facilities linked to the network - in Cantabria and the Basque Country - and the European H2Med corridor - consisting of a connection between Celorico da Beira in Portugal and Zamora in Spain (CelZa) and a maritime connection between Barcelona and Marseille (BarMar).

Enagás, GRTgaz and Teréga - in cooperation with OGE - signed the joint development agreement (JDA) for the BarMar interconnection on June 25, while Enagás and REN formalised an agreement reinforcing the joint Memorandum of Understanding to develop CelZa.

The approval by the Council of Ministers - at the proposal of the Ministry for Ecological Transition and the Demographic Challenge (MITECO) - is being carried out in accordance with the procedure established by European Regulation (EU) 2022/869 for the process of granting authorisations applicable to PCI projects, as well as Royal Decree-Law 8/2023, ratified in Parliament, which provisionally authorises Enagás, through horizontally separated legal entities, to exercise the functions for developing the hydrogen backbone.

In accordance with the provisions of the Royal Decree-Law, on April 28 Enagás submitted to the Directorate-General for Energy Policy and Mines a proposal for the development of the Spanish hydrogen backbone infrastructure with a ten-year horizon.

The Royal Decree-Law also allows Enagás to act as a representative in the European Network of Network Operators for Hydrogen. READ MORE

Excerpt from RigZone: The Spanish scheme will support green hydrogen projects with an installed capacity of at least 100 megawatts (MW). Qualified investments include the production of renewable energy-derived electricity, the production of renewable hydrogen-derived fuels, and renewable hydrogen storage, according to a statement by the Commission.

The government assistance will take the form of direct grants to bankroll capital. Allocation will be through competitive bidding.

Spain will fund the aid through the Recovery and Resilience Facility, a platform run by the Commission and supported by bond issuances and grants including from the Emissions Trading System. READ MORE