By Valentin BONTEMPS
April 25, 2023
The Barron's Daily
Madrid wants to ramp up production of emissions-free fuel like green hydrogen
The Barron's Daily
Madrid wants to ramp up production of emissions-free fuel like green hydrogen
Valentin BONTEMPS
Major green energy projects are sprouting up across Spain as it seeks to position itself as a future green energy leader -- but experts have urged caution over costs and demand uncertainty.
Spanish firms are ramping up production of emissions-free fuel and ploughing investment into green energy projects, despite fears over the high price of production.
"Everything is going very fast," said Miguel Angel Fernandez, technical director at the Spanish National Hydrogen Centre, a public research centre based in central Spain.
"There are so many projects, it is impossible to keep track of them all."
Most hydrogen is currently produced using polluting fossil fuels but so-called "green hydrogen" is made entirely using renewable energy such as wind, solar and hydropower.
While fossil fuels emit harmful greenhouse gases when they burn, hydrogen only emits water vapour.
Madrid launched a 1.5-billion-euro ($1.7-billion) plan in in 2021 to support green hydrogen projects, using a European Union Covid recovery fund.
Spain is now home to 20 percent of the world's green hydrogen projects -- second only to the United States.
Last year Spanish energy giant Iberdrola started operating what it says is the largest green hydrogen plant for industrial use in Europe, in the former mining town of Puertollano.
The plant uses 100 megawatts of solar panels to produce green hydrogen, which is stored in huge white storage tanks.
The initial goal is for it to provide 10 percent of the energy needed by a neighbouring factory belonging to fertiliser maker Fertiberia.
This will prevent the release of 48,000 tonnes of planet-warming carbon dioxide per year according to Iberdrola.
If the pilot project works, Iberdrola will launch a "much more important second phase" to meet 100 percent of the fertiliser plant's energy needs, said Javier Plaza, head of Iberdrola's green hydrogen division.
Rival Spanish energy firms such as Cepsa and Repsol have in recent months launched similar projects.
In Spain's sunny southern Andalusia region, three billion euros is being invested to create a "green hydrogen valley" where two large factories will produce 300,000 tonnes of green hydrogen per year from 2027.
In the northern region of Asturias 15 solar power parks will be built by 2030 to enable the annual production of 330,000 tonnes of green hydrogen.
So-called 'green hydrogen' is made entirely using renewable energy such as wind, solar and hydropower
Major green energy projects are sprouting up across Spain as it seeks to position itself as a future green energy leader -- but experts have urged caution over costs and demand uncertainty.
Spanish firms are ramping up production of emissions-free fuel and ploughing investment into green energy projects, despite fears over the high price of production.
"Everything is going very fast," said Miguel Angel Fernandez, technical director at the Spanish National Hydrogen Centre, a public research centre based in central Spain.
"There are so many projects, it is impossible to keep track of them all."
Most hydrogen is currently produced using polluting fossil fuels but so-called "green hydrogen" is made entirely using renewable energy such as wind, solar and hydropower.
While fossil fuels emit harmful greenhouse gases when they burn, hydrogen only emits water vapour.
Madrid launched a 1.5-billion-euro ($1.7-billion) plan in in 2021 to support green hydrogen projects, using a European Union Covid recovery fund.
Spain is now home to 20 percent of the world's green hydrogen projects -- second only to the United States.
Last year Spanish energy giant Iberdrola started operating what it says is the largest green hydrogen plant for industrial use in Europe, in the former mining town of Puertollano.
The plant uses 100 megawatts of solar panels to produce green hydrogen, which is stored in huge white storage tanks.
The initial goal is for it to provide 10 percent of the energy needed by a neighbouring factory belonging to fertiliser maker Fertiberia.
This will prevent the release of 48,000 tonnes of planet-warming carbon dioxide per year according to Iberdrola.
If the pilot project works, Iberdrola will launch a "much more important second phase" to meet 100 percent of the fertiliser plant's energy needs, said Javier Plaza, head of Iberdrola's green hydrogen division.
Rival Spanish energy firms such as Cepsa and Repsol have in recent months launched similar projects.
In Spain's sunny southern Andalusia region, three billion euros is being invested to create a "green hydrogen valley" where two large factories will produce 300,000 tonnes of green hydrogen per year from 2027.
In the northern region of Asturias 15 solar power parks will be built by 2030 to enable the annual production of 330,000 tonnes of green hydrogen.
So-called 'green hydrogen' is made entirely using renewable energy such as wind, solar and hydropower
DANIEL MUNOZ
Rafael Cossent, research associate professor in energy economics at Madrid's Comillas Pontifical University, said there was an "effervescence" in the sector putting Spain in a leading role in green hydrogen production.
This is partly due to Spain's abundant sun and wind power capabilities, he added.
The Spanish Hydrogen Association estimates there are currently 50 green hydrogen projects under development in the country.
Spain could potentially produce enough green hydrogen to cover its own needs and export to northern Europe, the association argues.
A major drawback for green hydrogen, however, has been the high cost of producing it.
While the price of the renewable energy used to make it has come down due to technological advances, green hydrogen has still not proven itself to be economically viable.
Massive use of green hydrogen will also require "complex transformations" by vehicles and industrial plants which make future demand for the fuel uncertain, said Cossent.
The government is counting on a planned underwater pipeline between Barcelona and Marseille, dubbed H2Med
Rafael Cossent, research associate professor in energy economics at Madrid's Comillas Pontifical University, said there was an "effervescence" in the sector putting Spain in a leading role in green hydrogen production.
This is partly due to Spain's abundant sun and wind power capabilities, he added.
The Spanish Hydrogen Association estimates there are currently 50 green hydrogen projects under development in the country.
Spain could potentially produce enough green hydrogen to cover its own needs and export to northern Europe, the association argues.
A major drawback for green hydrogen, however, has been the high cost of producing it.
While the price of the renewable energy used to make it has come down due to technological advances, green hydrogen has still not proven itself to be economically viable.
Massive use of green hydrogen will also require "complex transformations" by vehicles and industrial plants which make future demand for the fuel uncertain, said Cossent.
The government is counting on a planned underwater pipeline between Barcelona and Marseille, dubbed H2Med
MIGUEL RIOPA
A green hydrogen economy will need a robust transportation infrastructure to transport it -- which Spain is currently lacking.
The government is counting on a planned underwater pipeline between Barcelona and Marseille, dubbed H2Med, which is expected to transport some two million metric tonnes of hydrogen annually.
Hydrogen is difficult to contain without leakage however, making it challenging to store and transport, so delays to the pipeline are widely expected.
But the giants of the green hydrogen market are undeterred.
Iberdrola's Plaza said it is important to get into green hydrogen early because "whoever starts first has the advantage".
"We are talking about a long-term race," he added.
A green hydrogen economy will need a robust transportation infrastructure to transport it -- which Spain is currently lacking.
The government is counting on a planned underwater pipeline between Barcelona and Marseille, dubbed H2Med, which is expected to transport some two million metric tonnes of hydrogen annually.
Hydrogen is difficult to contain without leakage however, making it challenging to store and transport, so delays to the pipeline are widely expected.
But the giants of the green hydrogen market are undeterred.
Iberdrola's Plaza said it is important to get into green hydrogen early because "whoever starts first has the advantage".
"We are talking about a long-term race," he added.
© Agence France-Presse
Spanish industry kicks off EU green hydrogen race
By JENNIFER O'MAHONY
The Iberdrola green hydrogen plant sits in Puertollano, central Spain,
Hydrogen storage tanks are visible at the Iberdrola green hydrogen plant in Puertollano, central Spain, Tuesday, March 28, 2023. (AP Photo/Bernat Armangue)
“We have green hydrogen for these difficult-to-abate sectors, so that we can achieve the goal of a totally decarbonized economy,” Javier Plaza de Agustín, who manages Iberdrola’s green hydrogen arm, said.
The plant has the capacity to reduce Fertiberia’s emissions by 10%, but most of the fertilizer firm’s hydrogen is still drawn from natural gas, creating so-called “gray” hydrogen. The company plans to be 100% carbon neutral by 2035.
In these early days, the challenges for Spain’s green hydrogen players are several.
The first is cost. Javier Goñi, Fertiberia’s CEO, said green hydrogen technology is not yet delivering a cost-effective final product.
Spanish firms are pushing for EU subsidies to match the recent announcement of $750 million for research and development of hydrogen projects in the United States. They argue the subsidies are essential to grow the market so economies of scale make zero-carbon products cost-competitive.
“Right now, we are at such an early stage that we need that help from the public authorities to cover the funding gap,” Plaza de Agustín said. “Without a framework (it) is difficult to invest in a plant and facility for 20, 25 years without knowing what’s going to happen.”
The European Union’s executive commission has proposed that the 27-nation EU produce 10 million metric tons of renewable hydrogen by 2030 and to import 10 million metric tons more. Last month, the European Commission announced measures to create an intra-EU hydrogen market and to assess infrastructure needs.
But the second problem is the EU’s promise of ramped-up supply with little consideration for where the demand really lies, argued Núñez-Jiménez, the hydrogen expert.
“Spain and Portugal could produce a lot of green hydrogen, and demand in Central Europe may materialize, but the connection between supply and demand does not exist yet,” he said. “Developing the infrastructure to transport that gas from the Iberian peninsula to central Europe must be a priority.”
A battery storage facility says "renewable energy storage" at the Iberdrola photovoltaic solar plant in Puertollano, central Spain, Tuesday, March 28, 2023.
The Iberdrola photovoltaic solar plant is visible in Puertollano, central Spain, Tuesday, March 28, 2023. (AP Photo/Bernat Armangue)
But not everyone in Spain wants a hydrogen plant on their doorstep. The use of land for renewable energy installations, and the 9:1 ratio of water to kilo of green hydrogen produced can be a tough sell for regions suffering from long-term drought.
Pere Virgili, the mayor of the northeastern seaside town of Roda de Bera, rejected an initial proposal from a Danish green hydrogen developer last year that would have covered 42 hectares (103 acres) of territory with a mix of solar panels and wind turbines to power its electrolyzers.
“It’s not that we are against renewable energy, but we can discuss at length if using that much water and land to create it is actually environmentally friendly or not,” he said, adding that the project would create just 100 jobs.
___
Associated Press climate and environmental coverage receives support from several private foundations. See more about AP’s climate initiative here. The AP is solely responsible for all content.
___
Follow AP’s coverage of climate and environment issues at https://apnews.com/hub/climate-and-environment
By JENNIFER O'MAHONY
April 15, 2023
A worker walks inside an ammonium nitrate warehouse at the Fertiberia industrial complex in Puertollano, central Spain, Tuesday, March 28, 2023. Spanish energy company Iberdrola and fertilizer manufacturer Fertiberia partnered to create the first zero-carbon plant nutrients in the world. The fertilizer will one day be scattered onto malt barley, which will then be used to make Heineken's first "green malt" beverage. (AP Photo/Bernat Armangue)
PUERTOLLANO, Spain (AP) — In Spain, the dream of an emissions-free future for heavy industry starts with a rugged Castilian hillside covered in solar panels, and ends with an ice-cold beer. When the beer will be available, and how much it will cost, depends on an intervening rollout of green hydrogen.
This Mediterranean nation wants to become the European leader in hydrogen produced exclusively from renewable energy. With plenty of sunshine and wind and wide-open countryside to host those power sources, Spain’s ambition is to export the gas to the rest of the continent.
Green hydrogen is created when renewable energy sources power an electrical current that runs through water, separating its hydrogen and oxygen molecules through electrolysis. The result does not produce planet-warming carbon dioxide, but less than 0.1% of global hydrogen production is currently created this way.
As the global price of solar power continues to fall, Spain is betting that it can rapidly build a new supply chain for sectors of the economy that require hydrogen for industrial processes, and which have been harder to wean off fossil fuels.
A worker walks inside an ammonium nitrate warehouse at the Fertiberia industrial complex in Puertollano, central Spain, Tuesday, March 28, 2023. Spanish energy company Iberdrola and fertilizer manufacturer Fertiberia partnered to create the first zero-carbon plant nutrients in the world. The fertilizer will one day be scattered onto malt barley, which will then be used to make Heineken's first "green malt" beverage. (AP Photo/Bernat Armangue)
PUERTOLLANO, Spain (AP) — In Spain, the dream of an emissions-free future for heavy industry starts with a rugged Castilian hillside covered in solar panels, and ends with an ice-cold beer. When the beer will be available, and how much it will cost, depends on an intervening rollout of green hydrogen.
This Mediterranean nation wants to become the European leader in hydrogen produced exclusively from renewable energy. With plenty of sunshine and wind and wide-open countryside to host those power sources, Spain’s ambition is to export the gas to the rest of the continent.
Green hydrogen is created when renewable energy sources power an electrical current that runs through water, separating its hydrogen and oxygen molecules through electrolysis. The result does not produce planet-warming carbon dioxide, but less than 0.1% of global hydrogen production is currently created this way.
As the global price of solar power continues to fall, Spain is betting that it can rapidly build a new supply chain for sectors of the economy that require hydrogen for industrial processes, and which have been harder to wean off fossil fuels.
The Iberdrola green hydrogen plant sits in Puertollano, central Spain,
Tuesday, March 28, 2023. (AP Photo/Bernat Armangue)
Critics of Spain’s ambitions have warned there isn’t enough renewable energy capacity to produce green hydrogen that can replace natural gas and coal in the making of petrochemicals, steel and agricultural products.
But supporters are relying on the country’s plans for a head start to implant themselves in the nascent green hydrogen economy. The International Energy Agency estimated in December that Spain would account for half of Europe’s growth in dedicated renewable capacity for hydrogen production
“The sense of urgency is that everyone seems to be racing to be the first to export green hydrogen,” said Alejandro Núñez-Jiménez, an expert in green hydrogen policy at the Swiss Federal Institute of Technology in Zurich. “Once you build energy infrastructure, it’s going to be there for decades. So it’s really a game where the first one might lock in the situation for many years,”
A glimpse of the potential for green hydrogen can be seen in Puertollano, a former mining town now home to a large industrial park where Spanish energy company Iberdrola and fertilizer manufacturer Fertiberia have partnered to create the first zero-carbon plant nutrients in the world. The fertilizer will one day be scattered onto malt barley, which will then be used to make Heineken’s first “green malt” beverage.
Etienne Strijp, president of Heineken Spain, emphasized the difficulty of stripping carbon out of agricultural processing “Being carbon neutral throughout our value chain represents an enormous challenge,” he said at the announcement of the company’s plan to produce green malt.
The green hydrogen plant in Puertollano, Europe’s largest functioning facility, is currently in a pilot phase. Iberdrola owns the 100 megawatts’ worth of solar panels that power electrolyzers to separate water from hydrogen. Huge hydrogen storage tanks then feed pipes that take the gas direct to Fertiberia, where it is used to make ammonia, the foundational chemical in nitrogen fertilizers.
Synthetic fertilizers are a highly polluting product. A recent study found that fertilizers emit the equivalent of 2.6 gigatons of carbon per year, or more than global aviation and shipping combined. One-third of those emissions come from the production of fertilizers in plants like Fertiberia’s.
Critics of Spain’s ambitions have warned there isn’t enough renewable energy capacity to produce green hydrogen that can replace natural gas and coal in the making of petrochemicals, steel and agricultural products.
But supporters are relying on the country’s plans for a head start to implant themselves in the nascent green hydrogen economy. The International Energy Agency estimated in December that Spain would account for half of Europe’s growth in dedicated renewable capacity for hydrogen production
“The sense of urgency is that everyone seems to be racing to be the first to export green hydrogen,” said Alejandro Núñez-Jiménez, an expert in green hydrogen policy at the Swiss Federal Institute of Technology in Zurich. “Once you build energy infrastructure, it’s going to be there for decades. So it’s really a game where the first one might lock in the situation for many years,”
A glimpse of the potential for green hydrogen can be seen in Puertollano, a former mining town now home to a large industrial park where Spanish energy company Iberdrola and fertilizer manufacturer Fertiberia have partnered to create the first zero-carbon plant nutrients in the world. The fertilizer will one day be scattered onto malt barley, which will then be used to make Heineken’s first “green malt” beverage.
Etienne Strijp, president of Heineken Spain, emphasized the difficulty of stripping carbon out of agricultural processing “Being carbon neutral throughout our value chain represents an enormous challenge,” he said at the announcement of the company’s plan to produce green malt.
The green hydrogen plant in Puertollano, Europe’s largest functioning facility, is currently in a pilot phase. Iberdrola owns the 100 megawatts’ worth of solar panels that power electrolyzers to separate water from hydrogen. Huge hydrogen storage tanks then feed pipes that take the gas direct to Fertiberia, where it is used to make ammonia, the foundational chemical in nitrogen fertilizers.
Synthetic fertilizers are a highly polluting product. A recent study found that fertilizers emit the equivalent of 2.6 gigatons of carbon per year, or more than global aviation and shipping combined. One-third of those emissions come from the production of fertilizers in plants like Fertiberia’s.
Hydrogen storage tanks are visible at the Iberdrola green hydrogen plant in Puertollano, central Spain, Tuesday, March 28, 2023. (AP Photo/Bernat Armangue)
“We have green hydrogen for these difficult-to-abate sectors, so that we can achieve the goal of a totally decarbonized economy,” Javier Plaza de Agustín, who manages Iberdrola’s green hydrogen arm, said.
The plant has the capacity to reduce Fertiberia’s emissions by 10%, but most of the fertilizer firm’s hydrogen is still drawn from natural gas, creating so-called “gray” hydrogen. The company plans to be 100% carbon neutral by 2035.
In these early days, the challenges for Spain’s green hydrogen players are several.
The first is cost. Javier Goñi, Fertiberia’s CEO, said green hydrogen technology is not yet delivering a cost-effective final product.
Spanish firms are pushing for EU subsidies to match the recent announcement of $750 million for research and development of hydrogen projects in the United States. They argue the subsidies are essential to grow the market so economies of scale make zero-carbon products cost-competitive.
“Right now, we are at such an early stage that we need that help from the public authorities to cover the funding gap,” Plaza de Agustín said. “Without a framework (it) is difficult to invest in a plant and facility for 20, 25 years without knowing what’s going to happen.”
The European Union’s executive commission has proposed that the 27-nation EU produce 10 million metric tons of renewable hydrogen by 2030 and to import 10 million metric tons more. Last month, the European Commission announced measures to create an intra-EU hydrogen market and to assess infrastructure needs.
But the second problem is the EU’s promise of ramped-up supply with little consideration for where the demand really lies, argued Núñez-Jiménez, the hydrogen expert.
“Spain and Portugal could produce a lot of green hydrogen, and demand in Central Europe may materialize, but the connection between supply and demand does not exist yet,” he said. “Developing the infrastructure to transport that gas from the Iberian peninsula to central Europe must be a priority.”
A battery storage facility says "renewable energy storage" at the Iberdrola photovoltaic solar plant in Puertollano, central Spain, Tuesday, March 28, 2023.
(AP Photo/Bernat Armangue)
Hydrogen, the lightest element in the periodic table, is difficult to store and transport and is highly flammable. For this reason, Iberdrola built its hydrogen plant right next to Fertiberia’s factory, to minimize leakage. Once Iberdrola and its competitors have met Spain’s limited hydrogen needs for things like making beer, they will need to look outside its borders to keep growing.
“Everyone wants to be in hydrogen production,” said Goñi of Fertiberia. “But today, there are basically few companies and few sectors of activity that can absorb large amounts of hydrogen.”
Partnerships are key. Ammonia created at the Fertiberia plant with Iberdrola’s green hydrogen could be used to transport hydrogen in liquid form before it is reconverted into a gas.
Decarbonizing hydrogen for industry has taken on greater importance in Europe since Russia’s invasion of Ukraine. Russia is the world’s second-largest producer of natural gas, which powers most global hydrogen production.
Spain, France, Germany and Portugal have agreed to build a hydrogen pipeline by 2030 to transport some 2 million metric tons of hydrogen to France annually — 10% of the EU’s estimated hydrogen needs.
Hydrogen, the lightest element in the periodic table, is difficult to store and transport and is highly flammable. For this reason, Iberdrola built its hydrogen plant right next to Fertiberia’s factory, to minimize leakage. Once Iberdrola and its competitors have met Spain’s limited hydrogen needs for things like making beer, they will need to look outside its borders to keep growing.
“Everyone wants to be in hydrogen production,” said Goñi of Fertiberia. “But today, there are basically few companies and few sectors of activity that can absorb large amounts of hydrogen.”
Partnerships are key. Ammonia created at the Fertiberia plant with Iberdrola’s green hydrogen could be used to transport hydrogen in liquid form before it is reconverted into a gas.
Decarbonizing hydrogen for industry has taken on greater importance in Europe since Russia’s invasion of Ukraine. Russia is the world’s second-largest producer of natural gas, which powers most global hydrogen production.
Spain, France, Germany and Portugal have agreed to build a hydrogen pipeline by 2030 to transport some 2 million metric tons of hydrogen to France annually — 10% of the EU’s estimated hydrogen needs.
The Iberdrola photovoltaic solar plant is visible in Puertollano, central Spain, Tuesday, March 28, 2023. (AP Photo/Bernat Armangue)
But not everyone in Spain wants a hydrogen plant on their doorstep. The use of land for renewable energy installations, and the 9:1 ratio of water to kilo of green hydrogen produced can be a tough sell for regions suffering from long-term drought.
Pere Virgili, the mayor of the northeastern seaside town of Roda de Bera, rejected an initial proposal from a Danish green hydrogen developer last year that would have covered 42 hectares (103 acres) of territory with a mix of solar panels and wind turbines to power its electrolyzers.
“It’s not that we are against renewable energy, but we can discuss at length if using that much water and land to create it is actually environmentally friendly or not,” he said, adding that the project would create just 100 jobs.
___
Associated Press climate and environmental coverage receives support from several private foundations. See more about AP’s climate initiative here. The AP is solely responsible for all content.
___
Follow AP’s coverage of climate and environment issues at https://apnews.com/hub/climate-and-environment
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