Consortium Launches Spain-Based Hydrogen Business

A consortium of 30 companies including gas transmission system operators (TSOs), traders and banks have launched HyDeal Ambition, a pioneering hydrogen project that will be based in Spain. Solar-powered electrolysis will create green hydrogen across Europe at a price that is competitive with fossil fuel, Spain's TSO Enagas said February 11.

Building up from next year, the sponsors aim to reach output of 3.6mn metric tons (mt)/yr of hydrogen by 2030, with a capacity of 95 GW of solar and 67 GW of electrolysis. The starting point is 10 GW of solar, to be built this year. The gas will be for industrial users and transport and will be sold at €1.50/kg including transmission and storage, which Enagas says is the same as fossil fuels cost today. It says it will achieve that price before 2030.

The initiative's membership spans upstream, midstream, downstream and financial sectors and is the result of two years' research, analysis, modeling, feasibility studies and contract design, it said.

Enagas CEO Marcelino Oreja said: “The role of European operators that, like Enagas, participate in the HyDeal Ambition initiative, is fundamental. To achieve a just energy transition that fosters sustainable industry and skilled employment in Europe, it is necessary to make non-electric renewable energies competitive. In this area, it is important to have efficient energy infrastructures that allow equitable access to green hydrogen throughout Europe.”

And head of Spanish trader and supplier Naturgy Leyre de Adrian said hydrogen will "undoubtedly play a fundamental role in the industrial competitiveness of the future and in the decarbonisation of the gas sector and of the European economies.”

Other members include solar developers, electrolysis plant manufacturers, procurement and construction engineers, gas TSOs including German OGE, Italian Snam and French GRTgaz and Terega.

How to regulate?

The announcement comes a few days after the Association for Co-operation of Energy Regulators published a White Paper on when and how to regulate pure hydrogen networks. "The need and scope of hydrogen network regulation will depend on its structure and evolution," it said. 

Europe's natural gas networks have been regulated through tariffs, as they were deemed to have recovered their investment costs. This can be done by lowering their asset value and so reducing the annual return they might make. Also they do not trade gas or supply it commercially. Hydrogen networks however might need encouragement through a light touch approach in the early years.