On May 22nd and 23rd, the second edition of the Storage and Hydrogen Summit, organized by the Spanish Photovoltaic Union (UNEF), took place.
During the summit, discussions covered various aspects of storage and hydrogen technologies. On the storage side, topics included profitability, the value chain, or the permitting of hybrid and stand-alone installations. Regarding hydrogen, the focus was on its derivatives for industrial consumption, technological advancements, or the challenges of its permitting and connection to the grid.
Hydrogen
Hydrogen derivatives, created by combining hydrogen with raw materials such as carbon dioxide or nitrogen, are essential for promoting green hydrogen, as they currently offer the most competitive application of the green molecule.
However, there is an imbalance between generation and demand. The generation side is advancing rapidly due to the sector’s eagerness to provide alternatives, but the demand side lags, causing uncertainty and instability in the system.
Despite these challenges, Spain remains a leader in hydrogen. One-third of the preliminary awardees in the European Hydrogen Bank auction are Spanish, indicating strong potential for industrial consumption in the country. Thus, to maintain Spain’s leading position in the sector, administrative support and effective coordination and collaboration among companies are essential for the evolution of the entire value chain.
At Circle Energy, we are committed to the advancement of green hydrogen by the development of projects for hydrogen generation, as well as its derivatives, through renewable energy projects.
Storage
Key challenges in storage technology include the need for flexible access and connection permits, permitting cleverness, and the provision of price signals to encourage investment.
The creation of the Sub-directorate General for Storage and Flexibility within the Ministry is a welcome action, expected to reduce uncertainties and accelerate the implementation of storage technologies.
REE reports that in 2023, over half of Spain’s electricity generation was from renewable sources (52%), with projections of 68% by 2026 and 82% by 2030.
Currently, there are 10.8GW of granted permits and acceptabilities, 12% hybrid and 88% stand-alone. Of the stand-alone projects, 31% are connected to the transmission network and 69% to the distribution network. Grid managers should calculate generation and demand capacity by considering storage as a different technology and recognizing that its consumption will be flexible, not constant.
Storage technology offers significant advantages. It provides system flexibility, participates in ancilliary services and technical constraints, is vital for demand coverage and voltage control, and can be activated in N-1 scenarios. OMIE is working on two new markets: local flexibility and frequency response. There is a need for more attractive markets for stand-alone batteries, including daily (via auctions), continuous intraday, and adjustment markets. Progress is being made in defining the capacity market, but full completion is needed by 2024.
From a permitting perspective, the inclusion of storage within the simplified EIA is appreciated by the sector, however, greater flexibility and agility are required in areas such as urban planning qualifications, processing times, and the concept of flexible access to the grid.
Regarding battery technology, lithium remains the dominant choice due to its safety, reliability, durability, and high manufacturing volume, which helps reduce CAPEX.
