Econostrum | Economic News in the Mediterranean

Spain invests €1.55bn to convert to green hydrogen

Written by Eric Apim on Tuesday, May 25th 2021 à 15:25 | Read 788 times

Pedro Sánchez welcomed the first announcement of the construction of a plant in Guadalajara (photo: Pool Moncla/Borja Puig de la Bellacasa)
Pedro Sánchez welcomed the first announcement of the construction of a plant in Guadalajara (photo: Pool Moncla/Borja Puig de la Bellacasa)
SPAIN. Following the example of France and Germany, Spain has decided to embark on a large-scale production of green hydrogen by adopting a plan to support the production of this clean energy on Monday 24 May 2021. It will be endowed with €1.55 billion from the special European funds released by Next Generation EU to get economies back on track after the consequences of Covid-19.

"Firm support for this technology will stimulate investors to mobilise up to €8.9 billion between now and 2030," says a Spanish government statement. Madrid intends to build the main European industrial pole in the sector (4 GW of electrolysers in ten years) by relying on public-private partnerships. Clean hydrogen is obtained through a process of electrolysis of water using renewable sources of electricity such as wind turbines and solar panels. Its combustion releases only water.

A call for projects on green hydrogen in Spain has already received 502 proposals from companies focusing mainly on an innovative value chain (55%) and pioneering projects (25%) for a volume of €10 billion.


Guadalajara to host a green hydrogen production plant

On Monday 24 May 2021, the American Cummins and Iberdrola announced an initial investment of €50m in the construction of an electrolyser plant in Guadalajara in the Castilla y León region. With a production capacity of 500 megawatts per year (expandable to 1 gigawatt) and creating 350 jobs, it will be operational in 2023 on 22,000 m². "Spain is in the best position to be not just another hub, but the industrial hub for green hydrogen in Europe (...) We want to create a new energy model, with a tangible impact in terms of economic recovery, job creation and territorial cohesion," said Pedro Sánchez, President of the Spanish Government, at the presentation of the project in Toledo.

"Spain offers a strong and dynamic local environment for hydrogen production, and we are delighted to invest here and significantly increase our manufacturing capacity in Europe," said Tom Linebarger, CEO of Cummins, which has already installed some 600 electrolysers in 100 countries. "We are continuing to make progress with our ambitious plan to place Spain and Europe at the forefront of this technology, reducing energy dependence and fossil fuel consumption, while at the same time stimulating the economic and social revitalisation of the country," said Ignacio Galán, CEO of Iberdrola. His company has submitted fifty-three hydrogen-related projects (€2.5 billion in investments) to the Next Generation EU programme.

Green hydrogen, a tool for energy transition

The two companies have joined forces to develop this type of large-scale project in Spain and Portugal. In particular, they are working on a hydrogen refuelling station in Barcelona. "Our partnership with Iberdrola connects us with a major clean energy company and strategically positions us to be a European leader in green hydrogen production. We believe this is just the beginning of our expansion into new markets, bringing new clean technologies to customers and supporting efforts to make the European Union's Green Deal a reality. As communities move towards zero emissions, this is the latest example of Cummins' global effort to achieve carbon neutrality and accelerate the hydrogen economy," commented Cummins' CEO.

Castilla La Mancha is the third largest autonomous community in the country in terms of renewable energy production. Iberdrola operates 2,376 MW of wind and photovoltaic power there.

As a tool for energy transition, renewable hydrogen is a key element of decarbonisation and a complementary energy vector to the electrification process, particularly in sectors that are difficult to electrify such as heat production, heavy transport, maritime, rail or aviation. By 2050, it is expected to represent one third of the fuel used in land transport and 60% in maritime transport. Each kilogram of green hydrogen replacing one kilogram of fossil energy will avoid the release of 9 kilograms of CO2 into the atmosphere.


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