EU Approval of State Aid Propels Spain into Pole for Green Hydrogen Race as EU
Spain’s ambition to become a key producer of ‘green’ hydrogen – seen as a key part of the Europe’s transition away from fossil fuels – has moved a step closer to reality with approval EU of substantial state aid.
European Commission competition officials have given the green light to €1.2 billion in government support for Spain’s fledgling renewable hydrogen industry, in a further boost to the country’s ambition of becoming a major producer of the climate friendly fuel.
Under a scheme that will be funded entirely from Madrid’s share of the EU recovery fund set up in the wake of the Covid-19 pandemic, production plants with a capacity of 100 megawatts or more can apply for state support to develop ‘hydrogen valleys’ across the country.
Green hydrogen is produced using renewable electricity – Spain has huge untapped potential to increase is solar and wind power generation – to split water into its component oxygen and hydrogen, which can either be used directly as an energy carrier, or as a feedstock to produce synthetic liquid fuels with a near-zero carbon footprint.
The state aid will be disbursed by the end of 2025 through a competitive bidding system
The EU allows deviation from its usually strict prohibition of national support for domestic industry in cases where it furthers key EU policy goals – in this case, the transition to a net-zero economy – without unduly distorting the single market.
Commission vice-president in charge of competition policy Margrethe Vestager said the Spanish scheme would accelerate the build-up of green hydrogen production facilities in line with EU strategic goals.
“The scheme will also help Spain reduce its dependence on imported fossil fuels, while minimizing any potential distortions to competition,” Vestager said.
In a draft of its national energy and climate plan to 2030, which all EU members were required to produce and are currently being finalized, Spain’s target of 11 gigawatts of electrolyser capacity for green hydrogen production was the highest in Europe, with only Germany coming close on 10 GW. The current EU production target is for an annual 10 million tons of green hydrogen a year by 2030, although EU auditors warned last week the goal was unrealistic.
The Brussels-based trade association Hydrogen Europe – whose members range from petroleum multinationals with an eye on producing hydrogen from natural gas to wind turbine manufacturers – welcomed the EU endorsement of the Spanish support scheme.
“The Spanish announcement is yet more proof that the Iberian Peninsula is on the way to become a giant in the hydrogen economy,” the lobby group’s CEO Jorgo Chatzimarkakis told Euronews.
“It’s a very promising that the Spanish Vice Prime Minister putting forward these plans, Teresa Ribera, will likely become a European commissioner, hopefully for climate or energy,” the German former MEP added.
Dutch clean tech innovation powering Europe’s green energy transition
Clean tech companies are in the frontline of Europe’s efforts to become carbon neutral by 2050. A Dutch firm, backed by EU financial support, has developed a new green energy technology that will help achieve that goal.
Energy powers our daily lives, but producing and using it makes up 75% of the EU’s greenhouse gas emissions. Now, a Rotterdam-based clean tech company, supported by an EU investment program, is on a mission to help cut fossil fuel dependency with an innovation called the Battolyser. It’s an electrolyser, which can store renewable energy in a battery and produce green hydrogen.
Invented at a Dutch university, the Battolyser is fed by renewables like wind and solar
Once its battery is charged, energy can then be used to produce hydrogen. The system can also be instantly switched on and off, to match intermittency of supply.
Maarten van Heel, Battolyser Systems’ Director of Projects and Engineering explains how it can contribute to green energy generation: “Sixty percent of the costs of green hydrogen comes from the electricity,” he says. “What a Battolyser can do is when power prices are low, it produces hydrogen, but when power prices are high, it can stop producing hydrogen. Something that other technologies cannot do. It can also deliver the electricity back to the grid and therefore creating an additional income stream for customers.”
The company plans to build its first-large scale factory at the Port of Rotterdam, a welcome development for Boudewijn Siemons, CEO, Port of Rotterdam Authority: “We need the existing companies to do the transition and we need new companies that fill the gaps,” he says. “In the future, the energy system will be decentralized. We’ll need batteries and hydrogen production. And the fact that Battolyser combines the two of these is really a new offering in this new energy market.”
A finance deal worth 40 million euros has been signed with the European Investment Bank for the scale-up in production. It’s backed by a guarantee from the InvestEU Fund and in addition the project benefits from 2 million euros from the EU’s Just Transition Fund. It is now hoped the technology, developed in the Netherlands, will start rolling out from later this year.
