Ecological Transition allocates €1.214 billion to seven future renewable hydrogen clusters

The Minister for Ecological Transition and Demographic Challenge, Sara Aagesen, speaks at Europa Press's Breakfast Briefings

The Ministry of Ecological Transition and Demographic Challenge (MITECO) has published the provisional draft resolution of the call for aid for the creation of large renewable hydrogen valleys or clusters. It allocates a total of €1.214 billion of NextGenEU funds to seven projects located in Aragon, Andalusia, Castile and Leon, Catalonia and Galicia.

This was announced by the Third Vice-President of the Government of Spain and Minister for Ecological Transition and Demographic Challenge, Sara Aagesen, who stressed that "it is a call of strategic importance that advances the decarbonisation agenda. Ecosystems will be generated that consolidate an energy of the future, which is here to stay. The seven projects will create some 9,000 direct jobs and 11,000 indirect jobs during construction and operation, and 90% of the electrolysers are made by European manufacturers.

The seven beneficiaries of the H2 Valles programme propose developments with a total electrolysis capacity of 2,278 megawatts for the production of renewable hydrogen in 11 separate facilities, as the rules of the call allow more than one site per cluster if the distance between them is less than 100 km. Together, they will mobilise investments worth €4.907 billion. The proposal is still subject to technical submissions that may lead to changes in the shortlist, based on the final score obtained by each project.

Aragon and Andalusia

By autonomous region, Aragon, with two valley projects - one of them shared with Catalonia - receives the largest amount of aid, €384 million. It is followed by Andalusia (€304 million), Castile and Leon (€259 million), Galicia (€170 million) and Catalonia (€98 million). Three of the dossiers relate to locations in demographically challenged municipalities: Andorra (Teruel), Cubillos del Sil and La Robla, both in the province of León.

Given that the initially available budget, €1.2 billion of funds included in the RePowerEU Addendum of the Recovery, Transformation and Resilience Plan (RRTP), could be extended by up to an additional 10% to complete the support of the last awarded dossier, the final amount of grants could be €1.214 billion.

Electrolysis and derived fuels

The seven projects in the provisional draft resolution have an electrolysis capacity for renewable hydrogen production well above the minimum threshold of 100 megawatts set in the rules for the call. All of them also guarantee the required purchase commitments of at least 60% of this production from various industrial offtakers.

The best-rated projects also incorporate connected renewable generation facilities and undertake additional processes for the synthesis, storage and/or transport of green fuels derived from renewable hydrogen such as aviation PBS, e-methanol or ammonia. In terms of electrolysis technology, the promoters of the provisionally selected projects have opted for alkaline technology in the majority of cases.

In the weighting of merits, in addition to technical soundness and economic solvency, social and environmental criteria ranging from job creation, local economic development and emissions reduction to gender equality and local training, among others, have been taken into account.

Clustered value chain

The objective of this line of incentives managed by the Institute for Energy Diversification and Saving (IDAE), attached to the MITECO, is to promote the large-scale production and consumption of renewable hydrogen and its derivative fuels in order to promote the full integration of this vector into the Spanish energy mix and accelerate the reduction of CO2 emissions from large sectors of our industry and heavy transport.

Green hydrogen clusters or valleys are an essential element as they bring together in clustered locations multiple stages of the hydrogen value chain; from production and storage to distribution and consumption. This takes advantage of economies of scale, possible diversity of consumers in the same area and the multiplier effect this can have.

National Integrated Energy and Climate Plan

The drive to create renewable hydrogen clusters, linked to PRTR component 31 and the Commission's RePowerEU facility, is foreseen in the PERTE EHRA and is considered decisive for achieving the objectives set out in the Renewable Hydrogen Roadmap (4 GW by 2030) and in the review of the Integrated National Energy and Climate Plan (PNIEC) which provides for 12 GW of electrolysis capacity by 2030.

The line of incentives for renewable hydrogen valleys is preceded by the high level of interest and participation in the previous calls for H2 Pioneers, H2 Value Chain and three Major Projects of Common European Interest (IPCEIHy2Tech, Hy2Use and Hy2Move). As a result of these initiatives, more than a hundred developments are underway throughout Spain, including experimental proposals to generate knowledge on renewable hydrogen, applications in mobility and transport, and large electrolysers for generating this energy vector.

With a budget of more than €3.1 billion, the commitment to green hydrogen has meant that, in just two years, Spain is already in a position to launch subsidies that multiply the renewable hydrogen production capacity of the first projects financed by several orders of magnitude.

As stated in the Roadmap, Spain currently consumes more than 500,000 tonnes of so-called "grey hydrogen" of fossil origin per year. There is thus a huge potential for decarbonisation of industry and, at the same time, it allows other fossil fuels or other raw materials to be replaced with renewable hydrogen.

Non official translation