Iberia's Strategic Position in the European Hydrogen Market
Key Ideas
- Spain and Portugal are increasing their electrolyser capacity targets to 11GW and 5.5GW respectively by 2030, emphasizing their commitment to decarbonization.
- Portugal presents significant opportunities for hydrogen projects with its ambitious renewable electricity targets and exemption from the EU's REDII Delegated Act.
- While Spain has vast solar energy potential for hydrogen production, funding delays are hindering major players' targets and project developments.
- Both countries face challenges in securing offtake agreements, project funding, and developing necessary infrastructure for hydrogen exportation.
Iberia is central to the European hydrogen narrative, with Spain and Portugal focusing on leveraging their renewables potential to support the development of electrolytic hydrogen markets. Both countries have ambitious 2030 electrolyser capacity targets, with Spain aiming for 11GW and Portugal for 5.5GW. Portugal, with its progress towards 93% renewable electricity by 2030, offers significant opportunities for hydrogen project developers, exempt from certain EU regulations. Spain, on the other hand, benefits from its vast solar energy potential. Despite successful bids in the European Hydrogen Bank auction, project developments face challenges such as funding delays and securing offtake agreements. Infrastructure gaps in both countries also pose obstacles, with Portugal planning to inject hydrogen into its gas pipeline network and aiming for full conversion by 2024. The countries are exploring strategies like ammonia production for export while also being part of the European Hydrogen Backbone project. Overall, Spain and Portugal are well-positioned in the European market but need to address challenges in project development, funding, and infrastructure to lead in the hydrogen sector.