Spanish government launches support scheme for hydrogen valleys

€1.2 billion to support industrial-scale projects

Spain’s Ministry for the Ecological Transition and the Demographic Challenge (MITECO) has outlined a new subsidy program (Spanish language) to help establish valleys or clusters for renewable hydrogen production. €1.2 billion will be allocated to projects based on a set of criteria, including:

• Prior commitment from customer(s) to purchase 60% of hydrogen production
• Hydrogen must be “renewable” as per EU guidelines for electrolysis
• Electrolysis capacity must be more than 100 MW (with an exception for “grouping” of projects with at least 50 MW electrolysis capacity)

The maximum amount available will be €400 million for any single applicant. MITECO aims to reward “firm” projects, not just in technical feasibility terms, but also environmental and local socioeconomic impacts. MITECO also indicates that the scheme will also be focused on projects that take advantage of “economy of scale”. The program has also been given the tick of approval by the European Commission.

Subsidies awarded will go directly towards covering investment costs, including the production of hydrogen derivatives, hydrogen storage, and the production of renewable electricity. A competitive bidding process will launch later this year and be managed by the Institute for Energy Diversification and Saving, with winners to be announced in 2025 and 2026.

Projects underway

Several production projects utilising a cluster approach are already underway in Spain:

• HyVal: a consortium led by bp and Iberdrola developing electrolytic hydrogen production to decarbonise operations at bp’s Castellón refinery. bp took FID on the project (deployment timeline unspecified) last month.
• Fertiberia’s renewable hydrogen, ammonia and fertiliser production project at Puertollano. A new 50 MW electrolysis plant is in the early stages of planning (in collaboration with thyssenkrupp), joining an existing 20 MW facility operated by Nel and Iberdrola.
• Cepsa’s twin GW-scale hydrogen parks in San Roque and La Rábida.
• Project Catalina, a 2 GW electrolysis project in the Aragon region providing electrolytic hydrogen feedstock for fertiliser production.
• Also in Aragon, Project Hyscenia (launched in 2022 as HyDeal España) in northwest Spain, providing electrolytic hydrogen feedstock for fertiliser production and steel-making.

Project Catalina and Project Hyscenia were both winners in the recent European Hydrogen Bank subsidy auction.