Spanish energy giant Iberdrola is scaling back its green hydrogen targets by nearly two-thirds due to delays in securing funding for some projects, underscoring the challenges facing a market heavily reliant on subsidies. The company now aims to produce approximately 120,000 tons of green hydrogen annually by 2030, down from its previous goal of 350,000 tons.
The decision comes as Iberdrola embarks on a $45 billion investment drive over three years to expand and upgrade power grids, increase renewable capacity, and enhance energy storage in both Europe and the United States. Chief Financial Officer José Sainz Armada mentioned the reduction during a strategic update, citing funding delays for existing projects.
“The only target that we are diminishing is hydrogen. Not because we don't want to do hydrogen, we would love to do more projects, but we are still waiting for the funds to come through for the projects that we have presented,” Sainz Armada explained.
Green hydrogen, produced using renewable energy, is considered crucial for decarbonizing Europe's economy. However, due to its cost, green hydrogen projects often require subsidies to be economically viable. The International Energy Agency has cautioned that high production costs and limited demand are hindering the market.
“We have developed a wide portfolio of projects to supply hydrogen, as long as the price guarantees their profitability,” said Chief Executive Armando Martinez. “Incentives may be needed to get so.”
Iberdrola currently operates two green hydrogen plants and is constructing another. Additionally, the company has several projects in development, including a major facility in southern Spain's Andalusia region. This project, with an initial capacity of around 22,000 tonnes per year, has been selected to receive EU funds and is awaiting allocation by the Spanish government.
