HomeNewsSpain's Enagas to Gauge Hydrogen Appetite as It Seeks EU Subsidies

Spain's Enagas to Gauge Hydrogen Appetite as It Seeks EU Subsidies

7/26/2023

(Reuters) — Spanish natural gas grid operator Enagas is to start gathering data on hydrogen supply and demand as it moves forward with plans for national and international hydrogen pipelines it expects will get significant European Union subsidies.

Enagas is positioning itself to play a major role in the Spanish and European energy transition, moving from its traditional role as natural gas grid operator to managing a network of hydrogen infrastructure.

The company is to launch a non-binding call of interest on Sept. 14 to understand who the potential major customers and suppliers of its planned Spanish hydrogen trunk network are, CEO Arturo Gonzalo said on Wednesday.

Speaking to analysts in a call following the presentation of first-half results, Gonzalo reported progress in efforts to secure EU subsidies for multibillion-euro hydrogen pipeline projects connecting the Iberian Peninsula to France and on to Central Europe.

Both the Spanish hydrogen network project and the international corridor known as H2MED "are making significant headway" in the process that would ultimately allow them to get subsidies, he said.

EU funds could cover up to 30-50% of the projects' costs, he said, noting that the EU is likely to give greater support to international projects than to national infrastructure, which would still be eligible, but possibly for a smaller share.

Enagas estimates that the H2MED project will cost around 2.5 billion euros ($2.77 billion), including a pipeline to Portugal. The costs not covered by EU funds will be shared by operators in the countries involved.

The Spanish hydrogen network price tag is estimated around 4.6 billion euros.

Enagas' plans are in line with Spain's ambition to become a European green energy powerhouse. Madrid recently proposed a significant increase in its green hydrogen targets.

Asked about the potential impact of Sunday's snap general election, which ended in political gridlock Gonzalo said: "We don't have any concerns in that regard."

"Hydrogen is an area of agreement between the two mainstream parties in Spain," he said.

($1 = 0.9024 euros)

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