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Green Hydrogen
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Portugal plans to become EU’s principal green hydrogen producer
 

Portugal has the ambition to become “EU’s principal green hydrogen producer”. According to its National Energy-Climate Plan (NECP), Portugal is committed to “create a real market for renewable gases” to develop an industrial policy with the aim to “position Portugal as an important European player in the green hydrogen market, leveraging solar energy as a factor for competitiveness”. In its NECP renewable hydrogen is considered as a key technology to increase the production of renewable electricity and renewable gases in parallel, and to decarbonise sectors with limited low carbon solutions, like the transport and industrial sectors.

According to its NECP, Portugal expects by 2030 a final renewable hydrogen consumption of 65 Ktoe (756 GWh) in the transport sector, representing about 7% of the renewable fuels for transport. New regulatory and market measures are announced to pave the way for renewable hydrogen in the industrial, gas and transport sectors addressing the entire value chain from generation, over storage, transport and distribution to end use.

Portugal is in a favourable position for hydrogen deployment given its abundant renewable electricity potential, its 1GW electrolyser’s and solar farm flagship project in Sines, its involvement in the IPCEI project with the aim to “jumpstart the Portuguese Hydrogen Economy by implementing the necessary infrastructures and economic critical mass”, highlighting the great EU interest in deploying renewable hydrogen in Portugal. Portugal was also involved in the HyLaw project, that identified and assessed major regulatory barriers, in view of prioritizing measures to address them.

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STREAM advised one of the 37 approved hydrogen projects in Portugal
 

According to Matos Fernandes (Minister of the Environment and Climate Action), “producing hydrogen in Portugal can be very cheap” and “the existing pipelines in Portugal are 70% ready to distribute hydrogen”. In fact, Portugal offers a unique environment that is very aligned with investments in green hydrogen (e.g. climate conditions, infrastructures, financing programs, among other factors). Thus, the hydrogen strategy approved “has the potential to boost a new economic ecosystem, combined with the enormous potential for decarbonisation”, said Matos Fernandes.

With the approval of the Portuguese hydrogen strategy, more than 30 multi-billion euro hydrogen projects demonstrate its interest to be part of an Important Project of Common European Interest (IPCEI) scheme for hydrogen. That strategy could lead Portugal to become EU’s principal green hydrogen producer.

STREAM, as a recognized partner in supporting organizations investing in Portugal, has made the proposal of one of the 37 approved projects (out of 74).

Since 1st day, STREAM has been supporting the future of renewable hydrogen in Portugal. Our value proposition is based on an integrated offer of consultancy services that respond to the main needs that organizations may have when evaluating and deciding to implement their business in Portugal, especially through the pursue of national or international funding to our client’s projects.


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H2 Opportunities
European opportunities for hydrogen
 
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As hydrogen is enjoying a renewed and rapidly growing attention in Europe and around the world, a new study commissioned by the Fuel Cells and Hydrogen Joint Undertaking (FCH 2 JU) in consultation with the European Commission – DG Energy focuses on the opportunities for Hydrogen Energy Technologies considering the National Energy & Climate Plans.

Hydrogen can be used as a feedstock, a fuel or an energy carrier and storage, and has many possible applications across industry, transport, power and building sectors. Most importantly, it does not emit CO2 and almost no air pollution when used. It thus offers a solution to decarbonise industrial processes and economic sectors where reducing carbon emissions is both urgent and hard to achieve. All this makes hydrogen essential to support the EU’s commitment to reach carbon neutrality by 2050 and for the global effort to implement the Paris Agreement while working towards zero pollution.

Yet, today, hydrogen represents a modest fraction of the global and EU energy mix, and is still largely produced from fossil fuels, notably from natural gas or from coal, resulting in the release of 70 to 100 million tonnes CO2 annually in the EU. For hydrogen to contribute to climate neutrality, it needs to achieve a far larger scale and its production must become fully decarbonised.

This report highlights the potential and opportunities of renewable hydrogen, produced by electrolysers using renewable electricity and of low-carbon hydrogen, produced by steam methane reforming (SMR) combined with Carbon Capture and Storage (CCS). This includes estimates of 2030 hydrogen demand in a low and a high scenario in the EU Member States (plus UK) in the industry, built environment, transport and power sectors, and the resulting impact in terms of greenhouse gas emission reductions, infrastructure implications as well as the security of energy supply, financial impacts, employment and value added.

The main results and impacts of hydrogen deployment for the EU28 by 2030 in the two scenarios modelled in the present study are hereafter briefly presented:

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The study includes also two major parts: analysis of national opportunities for hydrogen deployment, based on the national hydrogen production and demand potential, the gas infrastructure and the enabling environment, and assessment of national economic, environmental and technical impacts of hydrogen deployment under a high and a low scenario.

In the follow figure, it’s illustrated the main results and impacts of hydrogen deployment in Portugal by 2030.

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Hydrogen in the EU’s economic recovery plans – EU incentives

On May 27th, 2020, the European Commission announced a Recovery Plan for Europe to counter the crisis caused by COVID-19 and to restart the economy. As said by the Commission, the EU Green Deal is the “EU’s growth strategy”.

The EU Recovery Plan consists of two instruments which add up to this first response: the Next Generation EU fund and a revised EU budget. Worth a total €750 billion and €1,100 billion, respectively, both will compose the next Multiannual Financial Framework (MFF), or EU budget, for the period 2021-2027.

The Next Generation EU combined with the revised 2021-2027 MFF will give the Union a firepower worth up to €1.8 trillion in order to rekindle the economy and achieve the Union’s priorities such as the Green Deal and the digital transition.

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Hydrogen is featured as a key sector that should receive support under the recovery plans, especially due to its ability to bolster the long-term objectives of the European Union, such as the EU Green Deal’s targets, climate-neutrality, and the EU’s strategic autonomy. Hydrogen and the hydrogen sector are explicitly mentioned multiple times across the Commission’s set of Communications. Under the current plans put forward, it is set to feature prominently in several schemes, namely:

  • Recovery and Resilience Facility
    Budget: €560 billion

The Recovery and Resilience Facility is the main tool of the EU recovery. It is broad in its scope and by its allocated funding (€560 billion, thereof a majority in the form of grants). Allocations are to be used, among others, to address “the challenges and priorities identified in the European Semester […], the national energy and climate plans, [and] the just transition plans” and therefore, in a wide range of green projects in line with the Green Deal priorities — including energy efficiency building upgrades. Indeed, projects will have to be part of national Recovery and Resilience Plans (RRPs), which will be assessed, i.a., against "green transition" criteria. Hydrogen technology is therefore eligible and can benefit from this scheme, provided hydrogen projects are included in Member States’ RRPs and that these get the Commission’s approval. Countries with hydrogen-ambitious NECPs, such as the Netherlands, Austria, Czechia, or Portugal, are expected to better highlight hydrogen in their RRPs.

  • InvestEU Fund | Strategic Investment Facility
    Budget €31 billion

“The new Strategic Investment Facility will invest in technologies key to the clean energy transition, such as [...] clean hydrogen," announces the Commission. Clean hydrogen, along with storage technologies, sustainable transport technologies and energy infrastructure, is repeatedly highlighted as a part of key strategic sectors. This support opportunity is therefore expected to be comprehensive as regards industry player types across hydrogen production, distribution, and end-uses

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Open Calls
A wide array of public incentives to promote the adoption of a hydrogen ecosystem in Portugal:
Innovation Fund | Support innovative green projects (e.g. hydrogen) – Deadline: October 29th, 2020;
LIFE | Climate Change – Deadline: October 6th, 2020;
European Green Deal calls – start date: September 22nd, 2020;
POSEUR | Support to the implementation of hydrogen projects in Portugal – start date (provisional): end of December, 2020
Future Events
• European Research & Innovation Days (Hydrogen) | September 22nd-24th, 2020 (Online);
• 1st Annual Asia-Pacific Hydrogen Summit | November 24th-26th, 2020 (Online);
• 2nd World Hydrogen Summit | March 9th-10th, 2021 (Amsterdam)
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Tel. 244 836 535 | Email. geral@streamconsulting.pt
Copyright © 2020 | Stream Consulting, Rua Senhor dos Milagres, 79, Milagres, 2415-020 Leiria
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