July 10, 2024 [Reuters]- The Spanish government has approved subsidies worth almost 800 million euros ($865.52 million) for major green hydrogen projects, Energy Minister Teresa Ribera said on Tuesday.

Spain is vying to be a leader in Europe in green hydrogen – hydrogen produced using renewable electricity – taking advantage of its bountiful sunshine and wind to produce clean energy.

The subsidies totalling 794 million euros will go to seven projects deemed by the European Commission to be of regional value and with an overall electrolysis capacity of 652 megawatts (MW), Ribera told reporters.

The projects will spur investments of more than 6 billion euros in their lifespan, according to the minister.

The subsidies will support projects that produce green hydrogen close to its consumers, Ribera said. They include projects in five so-called hydrogen valleys in Spain which are large industrial hubs that integrate green hydrogen production and its use, such as in producing fertilizers or powering refineries.

Green hydrogen is seen as key to decarbonise Europe’s economy in the future. However, given its cost, green hydrogen projects in general are not competitive without subsidies.

Some 40% of the funds will go to two projects managed by oil company Repsol each with an electrolysis capacity of 100 MW.

Almost a third, or 242 million euros, will go to Spanish utility Iberdrola’s projects in Puertollano in south-central Spain to develop 220 MW of electrolysis capacity.

The company, Europe’s largest utility, in March scaled back its green hydrogen ambitions by almost two-thirds after delays in getting funding for some projects it had announced.

Spain’s draft climate strategy sets a 2030 target of 11 gigawatts (GW) for electrolysers, up from a previous 4 GW.

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