- Spain, rich in natural resources and having a competitive renewable energy potential, is poised to invest in electrification, green hydrogen, and biofuels to become a European leader in sustainability and a clean-energy hub.
- Spain faces criticism over its existing renewable energy capacity and potential overuse of green energy for hydrogen production, which could slow down the overall decarbonization movement.
- There are concerns about whether the rest of Europe is ready for an influx of green hydrogen, given the current debates over the European Union’s Green Deal, and Spain’s upcoming election which could potentially alter the supportive policy environment.
Spain is set to be Europe’s green energy poster child. “Rich in natural resources and with highly competitive renewable energy potential, Spain boasts a privileged geographical position and a technically qualified economy […] to become a European leader in sustainability and a clean-energy hub,” states a recent McKinsey report . In order to reach a net-zero scenario, the report finds that Spain will have to invest in three key areas: electrification, green hydrogen, and biofuels.
The natural conditions in Spain give it uniquely high potential for wind and solar power generation capacity compared to the rest of Europe. This, paired with the country’s already robust manufacturing capabilities, supportive policy environment and “strong network of potential hydrogen off-takers” enable the nation to produce green hydrogen at a much cheaper cost than most of its neighbors and economic partners. Spain can produce green hydrogen at a levelized cost of €1.4 per kilogram (kg), versus €2.1 per kg in Germany, according to McKinsey.
‘;document.write(write_html);}
It’s an incredible economic opportunity, not to mention a key platform for climate leadership. Already, Spain has earmarked €18 billion ($19.5 billion) in investments to produce and distribute green hydrogen (the lay term for hydrogen generated from renewable power), “representing Europe’s most ambitious effort yet to implement technologies critical to becoming the world’s first climate-neutral continent” in the words of Bloomberg . “Spain is in a unique, privileged position to become a kind of Saudi Arabia of green hydrogen,” said Carlos Barrasa, vice president for clean energies at local refiner Cepsa SA.
Critics, however, have warned that there simply isn’t enough existing renewable energy capacity to produce sufficient amounts of green hydrogen to make the replacement of natural gas and coal in petrochemicals, steel and agricultural product fabrication feasible. Furthermore, there are questions as to whether all that green energy might be more useful in other applications. A new report by the International Renewable Energy Agency (IRENA) warns against the “indiscriminate use of hydrogen,” cautioning policy-makers to weigh their priorities carefully and to consider that extensive use of hydrogen “may not be in line with the requirements of a decarbonised world.” The report argues that green hydrogen “requires dedicated renewable energy that could be used for other end uses.” In other words, diverting too much green energy toward hydrogen production could actually slow down the decarbonization movement as a whole.