Spain's Risky Bet on Green Hydrogen: A Challenge to Keep Track?

Spain: Currently, most Hydrogen is produced using fossil fuels, which leads to high Carbon emissions. The introduction of "Green Hydrogen" production, which involves solely renewable sources like wind, solar and hydropower, promises to eliminate these emissions. Unlike burning fossil fuels, Hydrogen only releases water vapor, making it an eco-friendly alternative.

In 2021, Madrid introduced a €1.5 billion initiative to support the development of Green Hydrogen projects, financed by the European Union's €800 billion COVID recovery fund. This move has helped Spain become home to nearly a fifth of the world's Green Hydrogen projects, with the United States being the only country ahead of it. One of the leading Green Hydrogen ventures in Spain is Iberdrola's plant in Puertollano, one of Europe's largest Green Hydrogen facilities for industrial use. The plant harnesses 100 megawatts of solar panels to produce Green Hydrogen, which is stored in mammoth white storage tanks. Initially aimed to supply 10% of the energy requirements of neighbouring fertilizer manufacturer Fertiberia, Iberdrola's proposal is expected to prevent the release of 48,000 tonnes of Carbon Dioxide, thus reducing the impact of global warming.

An encouraging pilot project by Iberdrola has opened doors for a crucial second phase that aims to meet the energy demands of the fertiliser plant in its entirety, provided the initial operations are successful. The move has triggered a similar response from other Spanish energy firms like Cepsa and Repsol, who have launched their initiatives in recent months. Spain's Andalusia region is set to become a "Green Hydrogen valley" with an investment of €3 billion into two large factories that will manufacture 300,000 tonnes of Green Hydrogen annually, starting from 2027.

Moreover, the northern Asturias region is planning to build 15 solar power parks by 2030 to facilitate the production of 330,000 tonnes of Green Hydrogen each year. Spain is currently leading the charge with 50 Green Hydrogen projects underway, showcasing the nation's commitment to eco-friendly energy solutions.

Spain has the potential to produce enough Green Hydrogen to not only meet its own energy demands but also supply northern Europe. The high production cost of Green Hydrogen has been a major obstacle for its widespread adoption, despite significant reductions in the cost of renewable energy used for its production. The shift towards Green Hydrogen will require significant changes in the transportation and industrial sectors, making future demand uncertain. A robust infrastructure to transport Green Hydrogen is also required which Spain lacks currently. The government is banking on the proposed H2Med underwater pipeline between Barcelona and Marseille, which is anticipated to transport approximately two million metric tonnes of Hydrogen per year. While the road to a Green Hydrogen economy may not be completely smooth, Spain's commitment to investing in this technology suggests that it is determined to overcome the challenges and emerge as a leading player in the global green energy market.

Containing Hydrogen without any leaks is a difficult task, making it a challenge to store and transport. As a result, delays in the construction of the pipeline are anticipated. Despite this challenge, the key players in the Green Hydrogen market remain committed and undeterred in their pursuit of a sustainable future.