Environmental and economic opportunities in Northwestern Spain
At first sight, La Robla doesn’t strike one as being a future centre of modern technology, helping to lead the global effort against global warming and the decarbonisation of the economy. A small town in north-western Spain, about 30km north of Leon on the old road to Asturias, for miles either side lie open fields. Above the town rises a mountain chain, the Picos de Europa. Its economy was shattered some years ago by the closure of the mines and coal-fired power station on which most employment depended.
But now, green shoots are emerging. Green Hydrogen.
No, the gas isn’t coloured green; rather, it is made entirely using renewable, carbon-free resources. Two major Spanish energy companies, Naturgy and Enagas, are leading the development of what is currently the largest planned green hydrogen plant in Spain and one of the biggest in Europe.
Everyone knows that the chemical code for water is H2O – which means 2 atoms of hydrogen and one of oxygen. Electrolysis is a simple process that uses electricity to split water into the two gases. Hydrogen is a very light, very combustible gas that can be liquified under pressure. Unlike the natural gas we’re used to, methane (CH4), when hydrogen burns it simply combines with oxygen in the atmosphere and turns back into water – emitting no carbon dioxide at all, and no other harmful substances either.
There are many actual and potential uses for hydrogen. As a gas, it can be used as a high temperature fuel in industry, for example replacing coke in steel making, and for other heavy energy users such as cement, chemical and fertiliser manufacturing. With modifications to domestic boilers and some improvements to gas distribution networks, it can replace natural gas for home heating. It can even be used as an ingredient in the process needed to make green aviation fuel.
Fuel cells powered by Green Hydrogen are the answer
But most importantly, green hydrogen can power fuel cells. What’s a fuel cell? Essentially, a generator that burns hydrogen and outputs electricity (and water). Fuel cells can be of any size, starting from the size of a suitcase. Fuel cells can be installed anywhere where liquid hydrogen can be delivered and electricity is needed – not just fixed uses, but mobile, to power buses, trucks and ships. All very quietly, and without creating any pollution at all. Thinking of green hydrogen as energy storage, made using any surfeit of solar and wind power, fuel cells as on-demand generators to feed electricity into the national grids when demand is high and renewables aren’t available.
The mission is to achieve net zero global emissions and limit global temperature increases to 1.5oC by 2050. Investors are waking up to the opportunities quickly; it could become a US$10-trillion market by then.
Investment in green hydrogen is also very attractive to governments, as reducing reliance on oil and gas reduces imports and strengthens energy security.
If it’s such a wonderful fuel, why haven’t we been using it up to now?
The key reason is economics. If the electricity used to produce hydrogen is generated conventionally using fossil fuels, such as coal, oil or gas, that’s expensive – and even though the hydrogen may be non-polluting, the electricity generation needed to produce it certainly is. Because it’s not been cost-effective to make, economic methods of transporting hydrogen haven’t been developed. Now all that is set to change.
Until relatively recently, “renewable” electricity was expensive to generate, simply because of the high capital cost of wind turbines and solar panels. Now, not only has their cost fallen, but both types have now become much more efficient. As a result, the electricity generated is now cheaper than that delivered from gas and oil power stations, and countries all over the world have been racing to install them to maximise the amount of green electricity generated and reduce their carbon footprint.
However, their application is finite. The wind doesn’t blow all the time, and solar panels don’t work at night. Installing sufficient capacity of wind turbines and solar panels to meet peak demands would therefore mean that for a lot of the time there’s electricity going to waste, as it can’t be stored as such.
Step in Green Hydrogen!
All the excess green electricity generated can be used to make green hydrogen, which can be stored in liquid form, transported elsewhere and converted back to electricity at any time of day or night, whether or not the wind is blowing or the sun is shining. In fact, it makes both economic and environmental sense to install excess solar and wind generation capacity specifically for the purpose of making green hydrogen.
There are still some problems, though. Most notably, both solar panels and wind turbines take up a lot of land. That means finding places with the right climate to maximise their efficiency, where there’s wide tracts of land that are unsuitable or uneconomic for agriculture and sparsely populated. It’s also important to be able to site the green hydrogen plant close to the generators, to minimise the losses that would result from carrying electricity over long distance cables.
The process doesn’t just need electricity, but also a ready supply of water. The rivers and streams that flow down from the mountains towards La Robla assure that.
Transforming industry with Green Hydrogen
There also needs to be a reasonably local big demand for the green hydrogen, ideally as a replacement for the most polluting forms of energy. Just 100km to the north lie some of Spain’s major steel works and other heavy industry that have typically relied on coke and coal, and have therefore been the country’s biggest polluters. With investments being made by the government and from EU funds, those industries are being modernised to use green hydrogen instead. The hydrogen can be transported there by pipeline or, liquified, by rail (unsurprisingly, powered by green electricity).
Exporting Green Hydrogen from Gijon
There are also major ports within a range of just 120km. Apart from enabling the green hydrogen to be exported, those ships that are now being fitted with hydrogen fuel cell motors can be directly refuelled. Many people don’t realise that shipping is one of the world’s biggest polluters, relying as it does up to now on dirty heavy oil – global shipping pushes four times as much CO2 into the atmosphere every year as aviation.
…and there are many more advantages
La Robla and the area around it also bring a ready pool of labour, including many skilled graduates of Leon University, and excellent investment incentives from the local, regional and national government.
With all these advantages, many other businesses are currently exploring investment here on the back of the Naturgy/Enagas green hydrogen developments. It’s an attractive location for those who manufacture fuel cells, package and liquify gases and other businesses that relate to green energy; but also simply as a great location to site any kind of green manufacturing and research.
Global initiatives promoting Green Hydrogen
The Green Hydrogen initiative is a key element of the private sector climate action strategy being pursued by the UN Global Climate Action programme and their “Race to Zero” campaign.
The local and regional governments are ready to step in to bring co-investment from European recovery funds, provide over 1200 square kilometres of industrial land and smooth the administrative set-up. Spain, with more UNESCO-recognised biosphere reserves than any other country, is highly focused on clean energy initiatives, and Leon City is eager to pioneer a hydrogen-centric ecosystem.
These advantages have made a big impact with Enagas, the Spanish gas distribution company, and Naturgy, one of the country’s biggest energy utilities. Enagas led the creation of the European Hydrogen Backbone, an initiative already joined by 11 countries, between them planning a network of nearly 40,000km of hydrogen gas distribution mains that will eventually link 21 countries across Europe. Over 11,000km of this network will be ready by 2030, an early element being a connection from La Robla to Gijon, Asturias, a major port 120km to the north, from where green hydrogen can be exported to markets around the world.
Naturgy and Enagas are also amongst 900 companies who have joined the European Clean Hydrogen Alliance, an initiative promoted by the EU. Seeing green hydrogen both as a necessity to meet carbon reduction commitments and as a growth engine for economic recovery after the pandemic, the EU is subsidising this emerging industry to make it economically viable.
Opportunities for Foreign Direct Investment
The increasing number of commercial investors attracted by all these opportunities also note the availability of a large well-educated workforce in a region where the annual salary is below the national average for Spain, and the potential to build partnerships with the University of Leon, which already has established international links such as with the University of Washington, Seattle.
For more information about business and investment opportunities linked to this Green Hydrogen initiative, get in touch using our contact page and we will pass on your inquiry to the right people