The nascent European hydrogen market will see Spain spearheading supply of the renewable fuel to meet future demand from the bloc’s industrial users, according to the country’s grid operator Enagas.

Speaking during Enagas’ hydrogen event in Madrid last Thursday, chief executive Arturo Gonzalo singled out the role of Spain as the “first European hub” for green hydrogen supply to western and northern Europe, where the bulk of demand is expected to develop.

“Enagas aims to act as a catalyst of the hydrogen market,” Gonzalo said.

With several green projects on the cards in the country, involving the likes of Cepsa and Repsol among others, by 2030 Enagas forecasts Spain could produce between 2 million and 3 million tonnes per annum of renewable hydrogen and export almost 2.5 million tpa — 2 million tpa via the H2Med pipeline through France and 450,000 tpa exported by sea.

Production could increase to between 3 million tpa and 4 million tpa by 2040, the company forecast.

Spain would also move hydrogen produced in neighbouring Portugal, estimated at an additional 750,000 tonnes of annual imports by 2030.

According to Spain’s Secretary of State for Energy Sara Aagesen, the country is setting itself up as a “technological world reference” in hydrogen, with the sector acting as a “tractor” of energy transition in Europe.

As both the supply and demand sides of the industry develop, some regions in Europe will emerge as large consumers with insufficient local generation while others, such as the Iberian peninsula, with production capacity exceeding domestic demand and allowing for steady exports, the Gonzalo in Madrid.

“There will be areas that will particularly be in [supply] deficit for renewable hydrogen, such as Germany and the European industrial heartlands,” Gonzalo said.

Spain and Portugal will export hydrogen through the H2Med pipeline project, announced last December, that would connect northern Spain through southern France. French President Emmanuel Macron on Sunday announced the pipeline would be extended to reach Germany.

Overall, Enagas’ plan is to upgrade and extend the existing gas pipeline system to develop a network of axis interconnectors that would link hydrogen production and import areas, such as Galicia in the north and Andalusia in the south (of Spain), to the H2Med export route that will run offshore from the coast of Barcelona to Marseille.

One of these interconnectors, called CelZa, would run across the Portuguese border, allowing the country to send its excess output through the H2Med route.

At full capacity, H2Med could cover around 10% of Europe’s hydrogen demand by 2030, equivalent to some 2 million tpa.

“The [proposed] hydrogen network coincides with more than 80% of the existing gas network,” said Gonzalo. “There is an enormous synergy between the two.”

Building on the existing gas pipeline infrastructure would allow the reduction of some 30% of costs and cut the licensing timeline by 50%, he added.

The infrastructure will require a high level of investment, which is expected to be mainly deployed from 2026, when construction works should start.

The total cost for the infrastructure is billed at some €4.67 billion ($5.09 billion) — €2.5 billion for H2Med and the remainder for the inland domestic axis network and at least two underground hydrogen storage facilities.

“The most efficient way to move the hydrogen is in the form of hydrogen,” said Gonzalo, adding that existing gas grid operators are best placed to act as the conduit of future hydrogen market trade relations.

“The role of the TSO (transmission system operator) is perfectly compatible with the future role of the [hydrogen system operator] HSO.”

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