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Spain aims to boost green hydrogen with long-awaited subsidies

The nearly 800 million euros in subsidies come nearly two years after gaining approval from the European Commission.
Olivia Peluso
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Photo by Engin Akyurt on Unsplash

The Spanish government on Tuesday said it had approved subsidies worth about 800 million euros (US$865.52 million) for green hydrogen projects. 

The subsidies will go to seven projected deemed by the European Commission to be of regional value, with an overall electrolysis capacity of 652 megawatts (MW), according to the press release. The subsidies come nearly two years after they had been approved by the EC as part of the Hy2Use Important Projects of Common European Interest scheme. 

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

The funding would allow progress to be made in “testing, confirming and verifying that this is a viable solution allowing us to decarbonise industrial processes in which electrification is not possible," Energy Minister Teresa Ribera told reporters.

The green hydrogen projects will spur investments of more than 6 billion euros in their lifespan, Ribera said. The subsidised projects include five in so-called hydrogen valleys in Spain, which are large industrial sites that integrate green hydrogen production and use, such as in making fertilizers or powering refineries. 

To make green hydrogen, a producer needs an electrolyser: a device that splits water molecules into hydrogen and oxygen. Hydrogen is considered “green” if the splitting process does not emit greenhouse gasses. Some 96% of hydrogen used across Europe in 2022 was made from natural gas. 

Some 40% of the subsidies will go to two projects, each with an electrolysis capacity of 100 MW, managed by oil company Repsol. 

Some 242 million euros will go to Spanish utility Iberdrola to fund projects in south-central Spain to develop 220 MW of electrolysis capacity. Ibderdrola – Europe’s largest utility – in March scaled back its green hydrogen goals by almost two-thirds after delays in securing funding. 

Also on Tuesday, European airlines Airbus, Air Nostrum, Iberia, Spanish airport operator Aena, and energy companies Exolum and Repsol announced that they were partnering to study the creation of the first hydrogen airport hub located in Spain. 

“Given Spain's great potential in renewables and low carbon hydrogen production, it is essential that the aviation industry as a whole collaborates to secure a future end-to-end hydrogen supply chain up to the airports,” said Karine Guenan, Airbus’ Vice President ZEROe Ecosystem.

The government also approved a regulation allowing the installation of floating solar plants on state-owned reservoirs. Any floating plant would only be able to occupy 5% to 15% of the total surface area of the reservoir, and developers would receive a concession to operate these plants for up to 25 years, Ribera said. 

Floating solar plants produced more power than land-based ones due to the cooling provided by the water, while they also reduced evaporation in reservoirs, the energy ministry said in a statement.