In the update of the Spanish National Integrated Energy and Climate Plan (PNIEC), it was obligatory to revise it as to adapt it to the EU’s REPowerEU – a new European ambition – and thus, a new target was fixed: 11 GW of electrolysers in operation by 2030. The previous target, which was not in the PNIEC but in the Green Hydrogen Roadmap, was 4 GW, which is practically three times less than the now current objective. The ambition of the target is high, and, above all, it represents a decisive commitment to a technology that presently only has few MW in operation in Spain.

Despite this ambition, the objectives are not a leap into the void, far from it. Spain accounts for 20% of the world’s green hydrogen projects, behind only the USA. The most recent industry estimates put the number of projects related to this energy source at 123, with an approximate investment of €21 billion. The sheer number of projects is a positive sign, but we should not be overly dazzled because the vast majority of projects are not committed, but tentative. The development of green hydrogen requires a public impetus that finally is now beginning to materialise.

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11 GW of electrolysers is not much for what the energy transition will require fully. Germany, for example, has just declared that it wants to have at least 10 GW of electrolysers in operation by 2030. The use of hydrogen is necessary in some chemical and industrial processes that have no alternative today, such as fertiliser production, hydrocracking, desulphurisation, or hydrogenation. It has great potential for use in shipping, in methanol production, in the steel industry, as a precursor for synthetic aviation fuels or in high-temperature applications in industry. With less likelihood or intensity, it could be used in many other sectors, such as heavy road mobility or energy storage.

Spain already consumes around half a million tonnes of hydrogen, which is currently obtained from fossil fuels. Just to generate the hydrogen we already consume, we would need almost 3.5 GW of electrolysers running 100% of the time or 7 GW running half the time of the year, which is a more realistic metric. But the energy transition requires much more than replacing grey hydrogen with green hydrogen, it requires this green hydrogen to replace fossil fuels as many projects intend to do.

The Valencian company Pamesa recently presented the first green hydrogen installation in one of its atomisers, which replaces natural gas consumption. At the public presentation at the end of June, Pamesa’s president, Fernando Roig, assured that this plant was profitable at current prices for natural gas and emission rights (30-40 €/MWh for gas and 80-90 €/t of CO2). The project has received no subsidies or grants, and Roig himself has invested in the company that has developed the technological solution, Ecombustible Energy, which markets a type of green hydrogen that can apparently be adapted ad hoc to existing infrastructures and burners. These are the kind of projects that will increase the demand for hydrogen far beyond its current niches.



The development of green hydrogen is intrinsically linked to the future existence of a large renewable generation park in Spain. A recent report by the Spanish Hydrogen Association indicates that 56% of existing projects involve direct connections to renewable generation facilities. This results in the need for renewable installation at the local level because, although many projects plan to use PPAs, the vast majority will use direct connection in whole or in part. Hydrogen will be generated where renewable installations are available, increasing the potential for industrial development at these sites.

According to recent projections by the well-known strategic consultancy Bloomberg New Energy Finance, Spain will be one of the five countries in the world where it will be cheapest to produce green hydrogen in 2030, along with China, India, Brazil, and Sweden. In all these countries, green hydrogen will be cheaper than grey hydrogen by the end of the decade, so it should naturally displace at least the current uses of hydrogen. Spain’s solar potential will become the basis for the competitiveness of Spanish green hydrogen, but it will not be enough on its own. For an electrolyser to run enough hours per year and have a reasonable payback, a combination of solar and wind energy is needed. Fortunately, the competitiveness of wind power on the Iberian Peninsula is also high, which is precisely why we are currently in such an advantageous position to develop this technology.

Spain is in a strategic position to lead this technological race for green hydrogen. Within the European Union, only Sweden can achieve similar costs, so Spain’s commitment makes a lot of sense. However, another important issue remains: the manufacture of electrolysers. As in almost all technologies, China is the dominant manufacturing power, although in this case both Europe and the USA still maintain relevant manufacturing. There are powerful companies in Germany and Norway, but there are also projects in Spain, the most advanced of which is already under construction in the province of Guadalajara. If we  produce the most effective incentives and formulate a robust industrial policy, the renewable potential of our country will also work in our favour to attract this important industry.