Spain increases green hydrogen goal

Spain has raised its target for green hydrogen production capacity as a sign that it is confident in the industry, which has seen many energy giants cut back their plans due to high prices and an uncertain demand.

According to a document released by the Energy Ministry on Monday, an updated version of the government’s strategy has set a target for 2030 of 12 gigawatts of electrolysers that are used to produce green hydrogen. This is up from 11 GW, which was in a previous draft of a new update last year.

At a Tuesday cabinet meeting, the government will likely approve an updated plan for national energy and climate, which includes a new goal.

This plan provides a roadmap for businesses looking to invest. It sets targets for energy efficiency, renewable energy, and other areas.

Spain wants to be the European leader in green hydrogen - meaning that it is produced with renewable electricity. It does this by taking advantage its abundant sunshine and wind for clean energy.

The government has approved large-scale projects and attracted big investors like Chinese electrolyser maker Hygreen Energy, and China's Envision Group.

Some of the biggest energy companies in the area have, on the other hand, cut targets or scrapped low-carbon hydrogen projects, underscoring the challenges that an industry heavily dependent on subsidies faces.

Although low-carbon hydrogen is considered a key component to decarbonising Europe’s economy, it is also more expensive than natural gas produced hydrogen.

Shell cancelled a project to produce blue hydrogen in Norway using natural gas and carbon capture. The reason was a lack in demand. Equinor, a Norwegian company, cancelled a project of a similar nature last week.

Iberdrola, Europe's biggest utility, cut its ambitions for green hydrogen by nearly two thirds earlier this year after funding delays on some projects.

Madrid, like most European countries, missed the deadline of June 30th to submit its Energy and Climate Plan to Brussels.

The updated plan, while broadly similar to the draft of last year's document, keeps some goals, for example, a reduction in emissions by 32%. However, certain objectives are tweaked, for instance, the energy storage capacity target, which is now 22.5 GW, up from the previous 22 GW. Reporting by Pietro Lombardi, Editing by Alistair Bell & Mark Potter

(source: Reuters)