Spain Faces Water Limits as It Races Toward Green Energy
Experts warn that while Spain aspires to set a global standard in renewables over the coming decades, the country confronts a structural shortage of one key resource. Climate change is expected to intensify this challenge, testing the resilience of future energy strategies and industrial plans.
The push for green hydrogen and renewable power in Spain has been accelerated by substantial funding and a strategic push from the government. A major plan known as PERTE for Renewables and Renewable Hydrogen was approved late last year, backed by European funds intended to spur reindustrialization across the country. Notable investments illustrate the scale: a 2,000 million euro commitment by a major refinery operator to produce green hydrogen in Castellón; a 3,000 million euro bet on the Andalusian Green Hydrogen Valley led by Cepsa; and a 1,200 million euro project in the Catalonia Green Hydrogen Valley. In the automotive sector, Sagunto in the Valencia region secured around 4.5 billion dollars to establish a giga factory for batteries. Yet these ambitious projects face a central hurdle, water scarcity, a persistent problem worsened by climate change in southern Europe.
Water use varies with installation type and water quality. Estimates range from 16 liters to 100 liters required to produce one kilogram of green hydrogen. A major producer, Lhyfe Spain, suggests that roughly 3,000 liters of water can yield a kilogram of green hydrogen. In practical terms, this translates to substantial water consumption for transport and manufacturing. A typical electric car journey of 750 vehicles over 40 kilometers illustrates the scale of water demand. Industry leaders emphasize the need for careful water management as electrolysis-based hydrogen production remains water-intensive. A sustainability partner at EY Spain notes that companies must plan for prudent water use when operating in Spain. The central issue is the infrastructure to support a region prone to structural water shortages. Industry and researchers highlight that seven of Europe’s ten most water-stressed basins are in Spain, signaling a clear constraint on long-term investments.
Some industrial projects have already felt the pinch. A green hydrogen facility on a former Cemex estate in Mallorca has drawn attention for its high water use. Local groups contend the plant would draw about 15 million liters of water annually, a figure that concerns nearby communities. The Balearic Islands Water Portal records that La Lloseta, a town of around five thousand residents, received a comparable monthly allocation in the recent past. In 2019, the surrounding urban area used an even larger amount of water on a monthly basis, underscoring the tension between growth and resource limits.
In Germany, the electric car maker Tesla faced a similar dilemma with its gigafactory in Gruenheide. The plant requested about 3.6 million cubic meters of water per year, a volume that would saturate a significant portion of the local drinking water supply for tens of thousands of residents. Authorities proposed alternative allocations and stressed that producing an electric car generally consumes more water than producing a conventional vehicle. Spaniards can recall similar water pressures from manufacturing settings in other regions, including high-volume car production facilities that rely on substantial water inputs. The Seat factory in Martorell, for example, produced hundreds of thousands of vehicles in a given year while using a sizable amount of local water, highlighting the water-use footprint of large-scale manufacturing.
Desertification Risk in Spain
The nation faces a broad desertification risk, with up to 75 percent of certain regions considered vulnerable. Projections from hydrographic studies suggest a continued decline in water resources within basins, with estimates showing a decrease of three to seven percent by 2040. Meteorological analyses point to a gradual expansion of arid climates over the past thirty years. In Catalonia, reservoirs stood at about a quarter of capacity, raising concerns about water restrictions in the near term if rainfall remains scarce. Regions currently under the most intense water stress include Andalusia, Murcia, parts of Valencia, Castilla-La Mancha, and the Balearic and Canary Islands. Industry observers warn that if current trends persist, long-term investments must factor in these constraints. A senior analyst from EY Spain emphasizes the need for corporate planning that accounts for persistent water stress.
Pundits from the water management sector note that Spain shows a broader, more varied water picture compared with neighboring countries. The availability of water is a central conditioning factor for activity in many regions, influencing where and how projects can proceed. This reality underscores the role of smart water planning in the national energy transition.
Interest in green hydrogen remains high among autonomous communities. Four of seventeen regions announced plans in March for ambitious production projects. A recent report highlights the risk that hydrogen scarcity could cap production, especially in the Mediterranean climate with irregular rainfall. The study stresses that agriculture currently consumes about seventy percent of Spain’s water resources, a fact that intensifies competition for industrial needs. It also points to regional differences in hosting hydrogen ventures and notes that the lack of wastewater treatment facilities in the inland areas can hinder new renewable electrolytic projects. Industry analysts suggest that water reuse technologies can mitigate resource pressures, enabling large-scale manufacturing to proceed more sustainably. Francisco Sánchez-Miel of Aqualia Industrial highlights that reuse has become a practical solution for many companies already investing in gigafactories and other large-scale facilities.
In related developments, Cepsa has entered a partnership in Campo de Gibraltar to use treated wastewater for green hydrogen production, aiming to reduce fresh water use and support the circular economy. While drought tightens its grip on Spain, other European nations also experience intensified dry periods. A study on water risk projects that by 2050 about fifteen percent of Europe’s population could face high water scarcity. In France, a long stretch without rain has triggered concerns about climate impacts, including effects on nuclear cooling systems. Italy has recorded substantial declines in water resources over recent decades, and Central Europe has faced severe drought that affected transport networks. The overall message from researchers and industry observers is clear: water management will be a defining factor for the pace and location of renewable energy and hydrogen projects across Europe and beyond. The need for prudent water reuse, regional planning, and sustainable supply chains is more pressing than ever for a successful energy transition in a water-constrained world.