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Spain

Spain has the 14th largest economy globally in terms of nominal GDP, with a value of USD1.44 trillion in 2023. This translates to a GDP per capita of USD30,352, ranking 41st in the world. [1] . Spain is a global leader in renewable energy use for electricity generation, aiming for full reliance on renewables by 2050.  

 

The country is actively transitioning away from fossil fuels like coal and increasing its share of renewables in both energy supply and electricity mix. Natural gas remains the primary energy source, contributing 41.3 percent to Spain's electricity generation in 2021 [2] . Renewable energy is the second-largest source of electricity generation in Spain, accounting for 46.7 percent of the total in 2021. puts Spain as a global leader in renewable energy use. Within renewables, the breakdown is shown in the graph below:  

spain-ethopia

Fig 1: Installed capacity trend in Ethiopia ( IRENA 2022 )

 


Spain has opted to decarbonise the energy system by relying on renewable hydrogen in sectors such as industry and heavy transport, which are sectors that are difficult to electrify. Hydrogen holds potential as it be used to store energy from renewable sources to help secure supply. [3]

 

 

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 Fig 2: Electricity Generation trend in Ethiopia ( IRENA 2022 )

[1]    World Economic Outlook Database, April

[2]    Spain - Energy profile

[3]    Spain – a benchmark of renewable energies

GENERAL INFORMATION

In 2021,  Spain   exported USD102M in  Hydrogen , making it the 22nd largest exporter of  Hydrogen   in the world. The main destination of  Hydrogen   exports from  Spain   are:  United Kingdom  (USD33M),  Portugal  (USD20.1M),  Korea  (USD9.91M),  Germany  (USD6.99M),and  Italy  (USD6.96M). The fastest growing export markets for  Hydrogen   of  Spain   between 2020 and 2021 were  South Korea   (USD9.8M),  United Kingdom   (USD9.25M), and  Italy   (USD5.98M). [4]  

In 2021, Spain imported USD92.6M in Hydrogen, becoming the 26th largest importer of Hydrogen in the world. Spain imports Hydrogen primarily from: Netherlands (USD20.1M), China (USD16.3M), Portugal (USD14.7M), Algeria (USD12.1M), and France (USD10.5M). The fastest growing import markets in Hydrogen for Spain between 2020 and 2021 were China (USD10.6M), Netherlands (USD8.6M), and Algeria (USD4.24M).  

Overall, Spain is well-positioned to become a leader in the green hydrogen sector, with growing domestic demand, significant production potential, and export opportunities. The supportive policy framework further facilitates the development and adoption of this clean energy source.  

The government offers various financial incentives to attract investment and support green hydrogen projects, such as reduced corporation tax and R&D deductions, along with grants, subsidies, and feed-in tariffs. Spain actively fosters innovation and research, with Public-private partnerships and research collaborations. Fundings are allocated for research projects focusing on innovation and cost reduction in green hydrogen production, storage, and utilization.  

The Spanish government is actively promoting green hydrogen development through various policy measures and has laid down the National Hydrogen Roadmap [5] , which is commitment to renewable hydrogen" (October 2020) outlines the government's strategy and sets ambitious targets:  

  • 10 GW of electrolysis capacity by 2030

  • Developing a domestic green hydrogen industry

  • Production of 4 GW of green hydrogen by 2030 

  • Becoming a major hydrogen exporter by 2040

  Existing legal frameworks form a foundation for green hydrogen5:  

  • Law 26/2007 on Environmental Responsibility: promotes environmental considerations in hydrogen production.

  • Royal Decree 6/2022: simplifies regulations by aligning green hydrogen with the existing natural gas framework.

  • Order TED/1026/2022: establishes procedures for managing guarantees of origin for renewable gas


 

Spain is at the forefront of developing a clear and supportive regulatory framework for green hydrogen adoption. While a comprehensive European framework is still under development, Spain has established a framework that enables:  

Production:  

  • Guarantee of Origin system5: Producers must be registered in this system to ensure the renewable origin of their electricity used for hydrogen production. This fulfils the requirements for green hydrogen certification. 

  • Compliance with regulations on inherent risks: Green hydrogen production facilities must comply with regulations regarding the control of inherent risks of serious accidents involving chemical substances. 

Transportation and Distribution:  

  • Legal assimilation with natural gas [6] : The legal regime for natural gas carriers, distributors, and consumers applies to the supply of green hydrogen. This simplifies the process for existing natural gas infrastructure to be repurposed for green hydrogen transportation and distribution. 


 

INFRASTRUCTURE

Spain's existing infrastructure and abundant renewable energy resources create a strong foundation for its clean energy transition. Addressing the challenges through targeted investments and collaborative efforts will be crucial to unlock this potential and solidify Spain's position as a leader in the renewable energy sector.  

Spain has emerged as a European leader in the transition towards a renewable energy-based economy. Here are key developments highlighting this trend:  

Electricity Grid [7] :

  • Extensive network: Spain boasts a well-developed national electricity grid with connections to neighboring countries.

  • Development: Ongoing investments in grid modernization are crucial to handle increasing renewable energy 

Natural Gas Grid [8]  :

  • Repurposing potential: The existing natural gas grid infrastructure presents an opportunity for cost-effective transition to green hydrogen transportation and storage.

  • Developments: Pilot projects are underway to assess the feasibility and technical aspects of repurposing the grid for hydrogen. 

Ports [9] :

  • Strategic location: Major ports like Barcelona, Valencia, and Algeciras are strategically located for potential future green hydrogen export.

  • Investments: Investments are being made in port infrastructure to support the hydrogen economy, including bunkering facilities for hydrogen-fueled vessels.

Investments: Investments are being made in port infrastructure to support the hydrogen economy, including bunkering facilities for hydrogen-fueled vessels.     
 

Abundant Sunlight [10] :

  • High solar irradiation: Spain has some of the highest solar irradiation levels in Europe, making it ideal for solar energy production.

  • Developments: Solar PV capacity has seen significant growth in recent years, making it the second largest source of electricity generation in Spain.  

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Several large-scale green hydrogen projects are in various stages of development, demonstrating investor confidence and potential future growth:  

  • Repsol-led project: A 2 GW green hydrogen project in northern Spain, aiming to be operational by 2027. [11]  

  • CIP and Vesta proposal: A 2 GW project in Aragon, targeting production of green hydrogen for industrial applications [12]  

  • CEPSA project: A €3 billion project in southern Spain, aiming to produce 300,000 tonnes of green hydrogen per year, making it one of the largest in Europe. [13]  

  • H2Med pipeline project: This ambitious project aims to build a pipeline connecting Spain, Portugal, and France to transport green hydrogen across Europe. [14]  


 

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