The Ministry for the Ecological Transition has awarded €126.4m for two projects totalling capacity of 160MW in Castellon and Soria in the first national auction to finance the production of green hydrogen, after the projects were refused backing in the second European Hydrogen Bank auction when those funds ran out.
The first project is Orange.Bat, which has been developed by Swiss investment firm Smartenergy. It was awarded €82.5m in funding to construct a renewable electrolytic hydrogen production plant in Onda, which includes a 100MW alkaline electrolyser with an estimated annual production of 11,960 tonnes. The electricity will come from wind and solar farms and will supply 11 customers in the ceramic industry in the Valencian Community.
The second, the eM Numancia project, is supported by French energy firm Elyse Energy. It has been awarded €43.9m to construct a renewable electrolytic hydrogen production plant in Garray to produce green methanol. It will supply five customers in the chemical, timber, logistics and maritime sectors. The project includes a 60MW alkaline electrolyser powered by wind and solar farms, with an estimated annual hydrogen production of 6,363 tonnes and 33,334 tonnes of green methanol.
The funding has been allocated from the Auction-as-a-Service (AaaS) mechanism, which allows European Economic Area countries to fund domestic projects with their national budget using the EHB auction ranking.
The grants are managed by the Institute for Energy Diversification & Saving, part of the Ministry for Ecological Transition, and financed by Spain’s recovery plan. They are structured as subsidies for hydrogen produced and certified as 100% renewable, according to the Renewable Energy Directive. The subsidies last for a maximum 10 years from the start of operations, in projects that respect the principle of not causing significant environmental damage at any stage. This is the first time in Spain that aid is being given for hydrogen production, not for capital investment.
The government previously said it is prepared to allocate between €280m and €400m to the AaaS mechanism. So far, Spain has granted €2.7bn to green hydrogen projects through various programmes. The government views green hydrogen as a key part of its plans to decarbonise hard-to-abate industries and build a domestic hydrogen supply chain.
