The Spanish Government approved this month at the Council of Ministers its Hydrogen Roadmap for the next ten years, following the European Union’s strategy.

This guide includes 60 measures to prepare the regulatory framework and encourage research and innovation until 2030, the guide aims to reach an installed capacity of electrolysers of at least 4 GW. And the goal for 2024 is 300 MW – 600 MW. This is an ambitious objective, considering that it represents a 10% of the target proposed by the European Commission for all the countries members of EU.

Another purpose is to ensure that 25% of industrial hydrogen consumption comes from renewable sources by 2030, through the implementation of hydrogen-powered “hydrogenerators”, trains and heavy transport vehicles. The plan aims to control this by introducing a system of guarantees of origin to ensure that the origin is 100% renewable.

The plan seeks to open opportunities in the generation of sustainable employment and economic activity (manufacture of electrolyzer assemblies, fuel cells, components, vehicles, etc.) with all of this they try to encourage the value chain.

Below are some other detailed proposals:

  • Economic incentives.
  • Incentives for the consumer industry
  • Consumer centers: promoting and encouraging the creation of “hydrogen valleys”.
  • Support for the automotive industry.
  • Mobility services based on renewable hydrogen through a fleet of 150 buses, 5,000 light and heavy vehicles and 2 commercial train lines.
  • Development of rail infrastructure for refueling or hydropower (target of at least 100)
  • The participation of electrolysers in the electricity market.
  • New hydrogen production nuclei to prevent rural depopulation.
  • R&D support: exclusive financing for projects in the value chain.

They estimate that with these measures it will be possible to reduce greenhouse gas emissions by 4.6 million tonnes of CO2 equivalent, from 313 million tonnes in 2019. And they estimate an investment of €8.9 billion from funds set up by the Union, the EU Next Generation, and the Clean Hydrogen Alliance.

How Europe is positioned?

Europe has already spoken out this summer, positioning itself clearly, they want to become world leaders in clean technology. They see green hydrogen (from renewable sources) as the solution to cut emissions in sectors that are highly dependent on fossil fuels and where electrification is not possible, as well as being CO2 neutral and non-polluting.

This rule out investments in blue hydrogen (from natural gas with CO2 capture and storage) or grey hydrogen (from coal or gas).

Therefore, quite clear goals have been set. The aim is to increase the capacity to produce renewable hydrogen six-fold by 2024, reducing fuel costs.

What is your strategy?

The strategy of the European Commission is to face the change gradually, specifically in three phases:

  • Phase I (2020 – 2024)

Decarbonize the production of hydrogen already in use (in chemical sectors, for example). Install at least 6 GW of electrolysers capable of producing 1 million tonnes of clean hydrogen. (there is now only 1 GW and it is not clean)

  • Phase II (2024 – 2030)

Install 40 GW of electrolysers producing 10 million tons of clean hydrogen. Extend its use to sectors such as steel, and heavy transport.

  • Phase III (2030 – 2050)

Extend to other sectors where electrification is not possible. Generate 1 million jobs and cover up to 24% of the world’s energy demand with sales of 630 billion per year.

For this deployment, it is estimated to be invested between 180 and 470 billion until 2050. Some of them are contemplated in the €750 billion of the Reconstruction Fund that the EU has set up to help emerge from the Covid crisis.

A lot of work to do

Nowadays, the amount of used of hydrogen use is very small and most of it comes from fossil fuels and hydrogen from solar or wind origin is not profitable. To put in numbers: the hydrogen that we called green, costs between 2.5 and 5.5 euros/Kg. But hydrogen of fossil origin costs 1.5 euros/Kg. But costs are falling very quickly, in fact, over the last ten years it has fallen by 60% and is expected to continue to fall due to scale economies.

The objectives of Europe and Spain seem to be clearly going to break down the barriers that prevented the growth of hydrogen, writing measures to achieve an extensive storage, competitive production, and establishing a market.

It is clear that hydrogen can be a growth engine to help overcome the economic damage caused by the Covid. But we will have to see if the incentives are enough to increase private investment and reach the milestones as planned.

Sonia Díaz | Energy Consultant

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