On the occasion of the update to the PNIEC 2023-2030, presented by the Government of Spain last September, we interviewed our Managing Director Spain, Pepe León, during the PMH2 event. Based on the insights gathered at the event, we explored his perspective on this revision of the National Integrated Energy and Climate Plan. Pepe highlights both the opportunities and financial challenges that this new phase of the country's energy transition entails.
Update of the PNIEC 2023-2030
14
October
Objectives of the PNIEC 2023-2030:
- 76 GW of solar photovoltaic energy, including 19 GW for self-consumption.
- 62 GW of wind energy, of which 3 GW will be offshore wind.
- 22.5 GW of energy storage.
- 12 GW of electrolyzers for green hydrogen.
- A 32% reduction in greenhouse gas emissions (1990-2030).
However, achieving these objectives will not be easy. According to Pepe, "the energy transition is inevitable, but we must overcome several significant challenges to make it feasible." He points out that key challenges include the development of electrical and gas infrastructure, strengthening public-private collaboration, and creating a favorable regulatory framework for emerging technologies like energy storage and green hydrogen.
Green Hydrogen: A Strategic Pillar
Green hydrogen is a key sector for GSI and one of the core pillars of the PNIEC. Pepe emphasizes that the main challenge in this area is reaching 12 GW of electrolyzer capacity and producing nearly one million tons of renewable hydrogen annually, representing 10% of the European target. To achieve this, as highlighted in various presentations at PMH2, it will be necessary to address several critical issues, including investment in electrical and gas infrastructure and creating financial incentives to boost market development.
"Significant support is required both in the CAPEX of producers and in the CAPEX and OPEX of the end customer," he points out, adding that specific regulations and the transposition of European directives are crucial to reducing uncertainty around these projects.
Economic Aspect: A Key Challenge
From a financial perspective, Pepe emphasizes the importance of establishing long-term purchase agreements (HPAs) to reduce the investment risk in green hydrogen. "Although the European Hydrogen Bank has made progress in supporting operational costs (OPEX), it remains essential to secure these long-term agreements to ensure sector stability," he explains.
One of the biggest challenges is the disparity between the production costs of gray hydrogen and green hydrogen. While many consuming companies prioritize costs, Pepe, in line with others in the sector, trusts that over time, electrolyzer technology will evolve and reduce this cost gap. "As was the case with other renewable technologies, a firm commitment to project development, backed by subsidies and penalties, will drastically reduce costs," he comments.
Optimism for the Future
Despite the difficulties, during the event we saw how hydrogen-related companies, as well as Pepe, are optimistic about the future of renewable hydrogen in Spain and Europe. "In recent years, we have seen significant advances in terms of regulation and financing," he says, citing the definition of what constitutes renewable hydrogen and the binding consumption targets as key steps toward decarbonization.
However, he warns that in the short and medium term, energy prices are unlikely to decrease as expected due to the significant investments required. Even so, this is seen as a necessary sacrifice to ensure energy security and progress toward independence from fossil fuels.
Finally, Pepe highlights that the path to energy transition is full of challenges but underscores that it is "the only possible path to building a cleaner and more sustainable future."