Spain’s Hydrogen Valleys and the European Green Hydrogen Drive
The government has begun distributing multi million euro support to green hydrogen megaprojects designed to replace coal plants as they close. The Ministry for Ecological Transition approved the first definitive aid resolutions for projects that produce and use renewable hydrogen in industry. These initiatives were selected as European Union common interest projects by the European Commission. The initial direct aids will target new hydrogen valleys in areas affected by the closure of coal plants. These developments align with the European IPCEI Hy2Use initiative, which coordinates national efforts with industry to speed up decarbonization across Europe.
In another step, the executive announced definitive resolutions to inject 156 million euros of public funds from European sources into the hydrogen valleys projects at Aboño in Asturias and Los Barrios in Cadiz. The projects are led by the energy company EDP and together will deploy 200 megawatts of electrolyzers, enabling the annual production of about 24,000 tonnes of green hydrogen. Both initiatives were listed in the IPCEI Hy2Use program for advancing decarbonization across European industry.
The IPCEI Hy2Use program is a joint effort that brings together thirteen member states to promote industrial decarbonization through large scale electrolyzers and hydrogen production at Europe’s key industrial hubs. It also emphasizes research and development of innovative, sustainable technologies to integrate hydrogen into industrial processes across multiple sectors.
The Council of Ministers approved in July a royal decree to allocate 794 million euros in direct aid to seven Spanish projects for the production and intensive use of renewable hydrogen in industry as identified by the European Commission. Collectively, these projects will provide 652 megawatts of electrolyzer capacity and will mobilize more than 1.141 billion euros in immediate investment, with total lifetime investment expected to exceed six billion euros.
Asturias H2 Valley
The Ministry for Ecological Transition has approved a grant of 78 million euros for the Asturias H2 Valley project, located in the historic coal town of Aboño. The initiative represents a total investment of 169 million euros and features a 100 megawatt electrolyzer to produce and supply green hydrogen up to 12,000 tonnes annually, drawing electricity from wind, solar, and hydro sources to serve local buyers, including a fueling station.
The first phase, expected to be operational by late 2025, envisions a large scale green hydrogen hub with a capacity potential above 500 megawatts. EDP will pursue much of the hydrogen value chain at the site, although the initial phase targets 100 megawatts of electrolysis and does not include exports, bunkering, or injection into the gas network.
Looking ahead, EDP plans to reach 1,000 megawatts of electrolysis in Asturias by 2030. This production would be divided between the Aboño hub, within the Asturias H2 Valley with a 500 megawatt target, and the future Soto hub GH2Soto with another 500 megawatts near Soto de Ribera. These hubs would be linked by a high capacity hydrogen pipeline.
Green H2 Los Barrios
The H2 Green Los Barrios project also receives 78 million euros in direct support and is expected to mobilize a total investment of more than 169 million euros. EDP’s plan for Cadiz calls for a 100 megawatt electrolyzer that will produce green hydrogen using electricity from renewable plants for local buyers, including a fueling station in Palmones.
In the initial phase, the project will start with 100 megawatts of electrolysis by the end of 2025, at a large scale hydrogen hub planned to exceed 500 megawatts in a second phase. For that second phase, a feasibility study is examining the conversion of green hydrogen into other carriers, notably green ammonia for export via the port, and assessing ammonia supply for shipping.
Hydrogen Replacing Coal
Spain aims to lead the next energy transition and to become the largest European hub for renewable hydrogen. The country envisions hydrogen as a central element to decarbonize heavy industry and sectors where electrification is not readily feasible. Energy groups, industrial players, and research centers are pursuing hundreds of hydrogen initiatives linked to the future of green energy, aiming to replace natural gas with hydrogen produced from renewable electricity.
Spain is approaching the imminent phaseout of its coal plants. The electricity system is winding down these units, with fewer than four coal plants still active, and their future is closely tied to decommissioning plans. In recent years the number of coal plants has dropped from fifteen to four, located in Asturias, Cadiz, and Mallorca, with most scheduled closures on the near horizon.
Of the four coal plants still operating in Spain, three have already requested closure and are set to be replaced by green hydrogen projects in their surrounding regions. The Mallorca plant Alcudia remains in limited operation to support the Balearic power supply.