MADRID — With an abundance of sun and wind, Spain is positioning itself as a future European leader in green hydrogen production to clean heavy industries. But some experts in the energy sector expressed caution in raising an industry that would be entirely dependent on the massive increase in the availability of zero-carbon electricity.
Ecological transition minister Teresa Ribera hosted a major conference earlier this month for global renewable energy players. It focused on measures “to guarantee our energy security” while the European Union also focused on intra-bloc supply chains for energy needs.
The Spanish government announced a Hydrogen Roadmap in 2020, but the sector has gained more importance in Europe since Russia’s invasion of Ukraine. Russia is the second largest producer of natural gas in the world, driving most of the world’s hydrogen production. The International Energy Agency said in December that Spain will account for half of Europe’s growth in dedicated renewable capacity for hydrogen production.
Green hydrogen is produced when renewable energy sources run an electric current through water, separating hydrogen and oxygen molecules through electrolysis. The process does not produce planet-warming carbon dioxide, but less than 0.1% of the world’s hydrogen production is currently done this way, according to the IEA.
The separated hydrogen can be used to make steel, ammonia and chemical products, all of which require industrial processes that are more difficult to remove from fossil fuels. Hydrogen can also be used as a transportation fuel, which could one day revolutionize the polluting sectors of shipping and aviation.
“Renewable energy, including renewable hydrogen, is a central pillar of the REPowerEU Plan, which is the EU’s strategy to get Russia off fossil fuels as soon as possible,” said the Energy Commissioner of EU, Kadri Simson, in an email. Spain already has 15.5 gigawatts of electrolyzer capacity reserved for green hydrogen, higher than the target of four gigawatts outlined in the roadmap for 2030.
Spain’s large, windy and sparsely populated territory receives more than 2,500 hours of sunshine on average each year, according to the state’s weather agency, providing ideal conditions for wind and solar energy, and therefore the production of green hydrogen.
“If you look at where hydrogen will be produced in Europe in the next million years, it will be in two countries, Spain and Portugal,” said Thierry Lepercq, founder and president of HyDeal Ambition, an industry platform that brings together 30 companies. “Hydrogen is the new oil.”
Lepercq has worked with companies such as Spanish gas pipeline corporation Enagas and global steel giant ArcelorMittal to design an end-to-end model for the production, distribution and supply of hydrogen at a competitive price. Criticism centers on the higher cost of green hydrogen compared to polluting “gray hydrogen” extracted from natural gas. Lepercq argues that solar energy produced in Spain is priced low enough to compete.
While vehicles and heating solutions for buildings are increasingly electric, other sectors are more difficult to crack. Globally, Lepercq said, “Electricity, power, is 20% of energy consumption. What about the 80% without electricity? … You have to replace those fossil fuels. No in 50 years’ time. You have to replace them now.”
HyDeal aims to replace high-emitting processes such as the use of coking coal and blast furnaces to make steel, and natural gas in ammonia production for fertilizers. It must first build solar farms and electrolyzers in northern Spain, joining other green hydrogen plants recently inaugurated in central Spain and Mallorca.
The European Commission has proposed that the bloc produce 10 million metric tons of renewable hydrogen by 2030 and import 10 million metric tons more. Hydrogen consumption in Spain is currently around 500,000 metric tons per year, mainly produced from natural gas and used in refineries and chemical production. By 2030, the EU is trying to cut the bloc’s emissions by 55% compared to 1990 levels.
Spain, France, Germany and Portugal have agreed to build a hydrogen pipeline by 2030 to bring about 2 million metric tons of hydrogen to France every year – 10% of the EU’s estimated hydrogen needs. Hydrogen presents challenges for transportation because it is flammable and corrodes metals.
Ribera, the Spanish minister, knows that green hydrogen requires an initial investment that will only pay off in the long term.
Cutting emissions “requires an initial phase that can be covered by renewable energy,” he said in an interview with The Associated Press, adding that for sectors such as heating and transportation, “this is important to electrify.” Spain, he continued, must also cut fossil fuels for “end uses where electricity is not so simple.”
A large amount of additional renewable power generation is needed to build a green hydrogen future. The IEA says the world will need 50 gigawatts of renewable capacity dedicated to green hydrogen production by 2027 – a 100-fold increase.
Some industry experts argue that the push for green hydrogen is the wrong way to target a dangerous tipping point for renewables after the fallout of Ukraine’s war on the energy sector.
“In Europe in particular, there is a big push for hydrogen, which in my view is not justified,” said Antonella Battaglini, CEO of the Renewables Grid Initiative. The EU’s target of 20 million metric tons of green hydrogen by 2030 requires electricity “that we don’t have renewable resources to produce,” he added.
The current demand for hydrogen exceeds the planned supply in the EU, Battaglini argued, which puts “the risk that we will be pushed away from direct electrification into a hydrogen bubble.”
Experts like Battaglini fear that companies may argue that without enough renewable power, they will have to continue relying on fossil fuels.
“There can be very high costs. In economic terms, but also in environmental terms. You could have higher emissions than you have now,” he said.
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