The ‘H’ Explosion

Decarbonization and the slashing of greenhouse gasses are key goals of the G7 bloc; this has galvanized the best efforts of businesses in nations beyond the group itself. The envisaged energy matrix of 2050 is foreseen having an electricity share of around 50-60%, with the remainder accounted for by renewable heat and gases, notably hydrogen. Consequently, around 30 countries already have in place strategies for hydrogen technologies. The idea is to establish a so-called European Hydrogen Backbone, itself reliant on technology neutrality to viably harness the gas as an energy carrier. This, of course, is a big ask. It will require international commitment to the fundamental goal of combating of climate change. Climate Action Tracker, providing an independent scientific gauge of government climate action in light of the Paris Agreement, indicates that today no European country is on track to keep global temperatures below 2 degrees Celsius.

Spain in the race

In a white paper on reducing the cost of green hydrogen over the coming decade, Spanish-German engineering company Siemens Gamesa calculates price parity with fossil-based hydrogen between 2030 (for onshore wind) and 2035 (for offshore wind). Predictably enough, its stipulations for success are the setting of suitable policy frameworks and market mechanisms. Other requirements for the delivery of low-cost green hydrogen by 2030 listed in the whitepaper are an increase in renewables capacity, the creation of a demand-side market for green hydrogen, supply chain development, and a sufficient logistics, storage, and distribution infrastructure. The Hydrogen Council, meanwhile, calculates a global requirement of up to 6,000GW of new installed renewable energy capacity by 2050, up from the current 2,800GW to generate the anticipated 500-million ton hydrogen demand.

A hydrogen hub

It clearly, then, takes more than two to tango, and Spain’s nifty footwork on the hydrogen stage—including batteries for low-carbon mobility—relies on a EUR1.5-billion investment drawn from an EU recovery fund, one intended to invite close to EUR9 billion of private-sector led investment in related technology by 2030. Having been one of the most badly hit by COVID-19, Spain will also be among the largest recipients of the fund.

The country is working toward a shared EU goal of climate neutrality and a 100% renewable electricity matrix by 2050, relying on its Hydrogen Roadmap to do so. Prime Minister Pedro Sanchez has committed to producing green hydrogen over the coming three years, with Spain to become Europe’s preeminent hydrogen producer using renewable sources. Spain has in fact put in for EUR69.5 billion worth of grants to pay for its plan, resting heavily on green and digital economic transformation.
Slashing the cost of green energy is a must in order to gather scale. Green hydrogen results from electrolysis, itself fueled by cleaner wind, solar, or hydroelectric power. US engine maker Cummins has committed EUR50 million to building one of the world’s largest electrolyzer plants for green hydrogen production in central Spain, set to come online in 2023 in Castilla-La Mancha.

Late in 2020, BP, Spanish renewables firm Iberdrola, and gas grid operator Enagas pooled minds to study the potential for solar power to produce green hydrogen. The immediate target of attention the partial decarbonization of a refinery in Castellon that is both the greatest producer and consumer of hydrogen in the Valencia region. The scheme requires the use of electricity from a 40-MW PV array, plus other renewable sources to power an electrolyzer with an initial capacity of 20MW, potentially rising to 115MW. Being the biggest green hydrogen project at any Spanish refinery, it involves grey hydrogen generation giving way to green hydrogen. It promises to spare the environment up to 24,000 tons of CO2 per year.

Green hydrogen offers wider applications than energy alone for those nations committed to adopting it, in terms of the decarbonization of industrial and transportation sectors. Spain is determined to lead the way, much in the way that China has done with battery technology. With such a focus of attention and sizable funds for green energy development, some have warned of the risk of so-called “greenwashing,” whereby those funds predominantly end up in the hands of major corporations with other non-green business activities. If Spain is to realize its green hydrogen hub ambition, it will need to spread the benefits to lesser enterprises in a tightly regulated environment.