Grabación webinar lanzamiento Call for Interest de H2med | Enagás

Thank you very much. Just to explain a little bit the corridor at a glance, I'd like to stress that the corridor is in fact a trans-European market integrator of a crucial EU resource: hydrogen. In fact, its aim is to connect the best priced hydrogen with demand where it requires this hydrogen. In fact, this is also providing the opportunity for both to meet together with a solid infrastructure proposal. This project is being developed, as Arturo has just mentioned, between four countries and five TSOs. The four countries have a sponsor from their own governments to provide this, and the five TSOs are committed to deliver this type of infrastructure for the future. So this corridor, let's say, has both a connection between the national backbones and a transnational system that will deliver hydrogen where it is most required. It has about 5,500 kilometers of network, 35% of which will be repurposed pipelines, and it has a global capacity of around 2 million tons per year. And this will, as Arturo has mentioned, probably signify around 10% of the hydrogen EU requirements by 2030. And it has two major interconnections: CelZa and BarMar. The interconnection between Portugal and Spain is CelZa; between Spain and France is BarMar; and then the connection from France to Germany in middle time. This means, as you can see in this next slide, that the actual benefits of this corridor are because it will be a major enabler for EU decarbonization. As we see it, pipelines are the best available technology for cost-efficient H2 transport within the EU, and the corridor as we are proposing it tackles exactly this. This corridor will deliver cost-efficient H2 where it is needed the most, from cheap clean electricity where it is available to produce hydrogen, and guarantee also the security of supply and EU indigenous energy sourcing, which is vital for our commitment to a secure future. Also providing an industrial ecosystem and connecting the valleys around Europe. This corridor and its potential provide a path for a common achievement of H2 in the EU policy goals. This being said, I would start to present a little bit more the details and show where we have our pipelines and how they are structured. CelZa is a fundamental infrastructure that will connect the Portuguese backbone to Spain and deliver the gas on the path to Germany. CelZa is a pipeline that will have around 248 kilometers and will require a compressor station with a compressor power of around 24.6 MW, and this will be responsible for delivering 750 kilotons of hydrogen per year as a capacity. And this will require an investment of around 350 million euros. So I'll pass it on now to my colleague to explain the BarMar part.

So BarMar stands for Barcelona-Marseille. So it's a 450 km offshore pipeline that is crossing the Mediterranean Sea. Today there are still two options, two routes that are open, that are under study to determine which one is the most appropriate. One coastal route that is going along the Spain coast and the French coast, and another one which is a deep water route, as you can see on the picture. This will lead to 2 million tons of capacity and will be supported by a compressor station in Barcelona. Overall it is an investment over 2 billion euros. So let's move now to the overall commercial process. I'd like to outline the overall commercial process of this project, which has been already mentioned by Arturo, which includes two main phases. First, we will have a non-binding phase that will span from 2024 to 2025. This initial phase starts with a non-binding call for interest that is aimed to attract interest and analyze the information we are going to collect. It will help also to qualify stakeholders that are interested in our project. Today's webinar has two objectives: first, we will present the infrastructure that are included in the call for interest in Portugal, Spain, France, and also the connection with Germany, which are detailed in an info memo that you can find on the website; second, we will guide you on how to participate in this call for interest, how you can submit your information. Please be aware, and that has been said already but I need to repeat it, that the collection of information will close in December, on December the 18th, and the result of this phase will be presented during the first quarter of 2025. After that we will have a bidding phase that will begin next year and extend probably until 2026. This phase involves further information collection, detailed analysis, and active interaction with participants in order to refine commitments. In 2026, we will focus on participant engagement and formalization of binding agreements. We believe that this approach ensures a thorough evaluation and fosters active stakeholder engagement before finalizing agreements. Importantly, it also guarantees that the project development is a sound, future-proof investment aligned with market needs and sharing relevance and long-term value. As you can see, this project is a true example of collaboration between companies and institutions that will be key to achieve European hydrogen targets while enhancing security of supply, decarbonization, but also reindustrialization and price competitiveness in each member state across the corridor. So I'm passing the floor now to my colleagues that will detail country by country how the corridor looks.

Thank you. Starting with Portugal and following the route of the gas, hydrogen will be starting the production in Portugal, and I want to explain a little bit the Portuguese contribution. Portugal is a country where electricity has a low cost of generation from renewables because of its solar and wind capabilities. We have provided the connecting pipeline, so the Portuguese backbone, in an area where it is possible with low-cost areas to develop production of hydrogen injection in this network. And we are aligned with the Portuguese strategic targets stated in the National Energy and Climate Plan for 2030, which provides a forecast of around 3 GW of electrolytic capacity up to 2030 that will probably be able to produce around 300 kilotons per year of equivalent hydrogen. Portugal is a country committed to hydrogen. As an operator of the gas network, we have already achieved the certification of 10% hydrogen content for all our network, and this is a first because it is the first time that there is a national certification for hydrogen in the networks up to 10% in a country in Europe. And we are looking into the 100% compatibility to prepare the way for the backbone. We expect this to be concluded, at least the plan and the requirements, up to the end of this year. This is also market-oriented, and the CFI – this call for interest – is fundamental for us to provide the matchmaking and to complete the identification of what is required for the network to provide as a service. And I'll pass the word to my colleague Natalia.

Thank you very much. In Spain, Enagás already ran a call for interest in the last quarter of 2023. The results that we got at that moment show that Spain has the potential to produce up to 3 million tons of renewable hydrogen by 2030, a domestic demand of 1.3 million tons, and therefore the opportunity to export to Europe around 1.5 to 1.7 million tons. Those results were really important for us for two main reasons. The first one is because they show that Spain can become the first hydrogen hub in Europe, and the second one supports the proposal of infrastructure that Enagás submitted to be recognized as a project of common interest of the European Union: the Spanish backbone, two associated underground storage assets, but also CelZa and BarMar projects as H2Med corridor. Since that moment, many milestones have happened in Spain that demonstrate that hydrogen is a reality in our country. We started the year with the designation of Enagás as provisional hydrogen transmission network operator. This allowed us to present to the ministry a proposal of infrastructure for a 10-year horizon. The second important milestone has been that the Council of Ministers approved the authorization for Enagás to start with the development of those projects that have been recognized as projects of common interest. And the third important milestone has been the National Integrated Energy and Climate Plan that has raised the ambition of hydrogen production in Spain up to 12 GW of installed electrolyzer capacity. Also, this plan strongly supports the H2Med project as one of the key infrastructure for Europe, connecting supply in Iberian Peninsula with the demand centers in the north of Europe. For this reason, the Portuguese and the Spanish infrastructure are essential for this project, but also the French infrastructure that my colleagues will explain now.

So now if we turn to France, clearly hydrogen has been identified as a key pillar of our decarbonization strategy and also key for promoting reindustrialization. So hydrogen has been really identified as a key pillar for specifically the decarbonization of hard-to-abate sectors such as industry and mobility. The priorities of the French policy since 2020 has been to expand the electrolyzer production capacity as well as the transport and storage infrastructure, and also to establish a supportive framework for the industry development, and also to build and facilitate the building of ecosystem integration across the whole value chain. All this is possible thanks to a support plan, a funding of 9 billion euros by 2030. So this is from a political perspective. But from a TSO's perspective, we have been working also during the last few years in order to develop projects around the storage and transmission of hydrogen. Terega and GRTgaz have done a public consultation in 2021 at a national level, and the key results of this public consultation and the key concerns of the market players are around competitiveness and security of supply. And we truly believe today, we are fully convinced, that projects such as H2Med corridor are completely responding to those concerns. And afterwards, every TSO – on Terega's part, we have also conducted a call for interest on our perimeter, on the southwest part of France, Nouvelle-Aquitaine and Occitanie region. And here we have really confirmed this dynamic for hydrogen, especially from a production perspective but also from an industry perspective and from the e-fuel industry. And there is also a potential of storage in this area. There is a storage project in the Niten also bringing additional flexibility to this whole corridor. And now I would turn to Jean Marc who will explain the dynamic on GRTgaz network.

Obviously, along with Terega, we believe that infrastructure is essential for establishing this integrated hydrogen market and promote competition, ensuring supply security and supporting the integration of more renewable energy sources. On the GRTgaz side, our strategy is very much aligned on the French national hydrogen strategy. It's composed of two pillars. The first one consists in developing infrastructure in local ecosystems. We are positioned in strategic industrial hubs or port areas that currently host large energy-intensive industries and major carbon emitters such as chemical, steel, and refining that have actually significant decarbonization needs. So those projects are aimed to connect the production of low-carbon renewable hydrogen to the consumption of this hydrogen. They are located, as you can see on the slide, in the north of France in Dunkirk, in Alsace, in the Rhône Valley, and in the south of France near Marseille. I would like to stress that most of our projects have reached pre-FEED and FEED stage. For Mosaic, which is our flagship project, we have taken FID this year. All of them are actually PCI – projects of common interest – for the European Commission. The second phase of our strategy will be actually to interconnect both local ecosystems at national level and develop links with neighboring countries. So the objective is obvious: provide competitive hydrogen, ensuring security of supply, but also give access to storages. So that's what we are doing actually with HyEen, which is actually the French backbone which is connecting the southeast of France all the way to Germany, and that will actually also connect all those ecosystems I just mentioned. HyEen is a PCI as well. We believe that this coordinated approach will create a competitive and more resilient sustainable hydrogen network across France but also Europe. We can say that more generally, H2Med aligns very well with the French strategy for hydrogen and it also supports the use of hydrogen in industrial sectors and mobility purposes, particularly in hard-to-abate sectors. We are actually capitalizing on the geographic advantages we have on this corridor to build on cross-border storage capacity to provide more flexibility. This approach also allows for shared infrastructure to meet both domestic and transit needs. We believe also that H2Med will offer a significant competitive edge for hydrogen delivered via long-distance infrastructure, connecting cost-effective production zones in the Iberian Peninsula with major consumption areas in France and in Germany. So now I leave the floor to Germany.

Yes, thank you. The hydrogen will flow from the H2Med corridor via France to Germany at the interconnection point at the French-German border, which is called Obergailbach or Medelsheim, which is visible here on the map. And it connects the HyEen grid, as Jean Marc told already, with the HULAS South grid, which is joint infrastructure of GRTgaz Deutschland, and it is part of the German corridor. And the German corridor is the German answer to the chicken-and-egg dilemma. And we have just received the approval from our regulator to create and operate the infrastructure in the regulated environment, added by a financial model which includes two major points. One is we have a capped tariff over more than 20 years which allows for affordable transport tariffs also for the first volumes in the first years. And the second thing is we have governmental guarantees which allow us to mitigate the risks of our project because the government will take 76% of the risk in case of failure of the whole hydrogen economy, which made it much easier for us to take the FIDs in front of the rest of the market to have infrastructure in Germany first. So by this, the first pipelines will come into operation next year, planned for 2025, and projects are running. So finally all pipelines will be there in 2032. So means at latest by that point in time, as soon as you've got an entry into the German system like at Obergailbach/Medelsheim, you can reach every point at the corridor which is connected to the corridor over the next years, successively in the development of the core grid. And we expect a growing demand in Germany evolving over the years, but the domestic production in Germany will not be sufficient to satisfy this demand, like mentioned in the German hydrogen import strategy, the German national hydrogen strategy, or in several market surveys which we have performed already in Germany. Therefore, Germany depends on imports. And the collaboration like we're having here in H2Med with our partners to be connected to an import route, one of the most important import routes in Europe, to get access to volumes produced in the Iberian Peninsula or in France, and that for two reasons: to have the volumes available and of course to benefit from the efficiency of renewable production in southern Europe. And that not only for German consumers of course, but for all consumers along the corridor who will benefit from this scale-up of the hydrogen market. The core grid can be seen as the first iteration of a long-term network planning process, with indicative timing of the measures and the infrastructures to be developed over the next years. We will have several iterations of this process by the network development plan happening every two years from now on. The first one is in preparation at the moment, which will define and specify the measures to get to the final corridor in 2032, meaning pipelines will be realized in Germany at that point in time when they are needed, proven by market signals. And to get this market information and to make it available for us here planning our projects, we are performing the call for interest to better understand when volumes will be needed to be transported along the corridor, and especially from the German perspective from France to Germany. Therefore, in the call for interest, the question regarding this interconnection point Obergailbach/Medelsheim refer according to our understanding to all different kind of market roles. So the producer in Spain or France or Portugal who intends to supply a consumer in Germany is invited to participate for this interconnection point, but of course the German consumer who at least considers to supply himself partially or fully via the H2Med corridor from France and this interconnection point here is invited to participate – if he books the capacity in the end himself or if he has a midstream shipper, trader, or supplier, whatever we might call this role in between, to supply him – doesn't matter. We'd like to have the participation from the consumer but also then of course from the midstream to in the end better understand how the market will supply the consumers in Germany. And with this outlook to Germany, I'd like to hand over to Pedro again.

So, why are we doing this call for interest? As we have explained and you will perceive during these presentations, it is important to coordinate the efforts of the different stakeholders of the sector and their understanding of what we are doing together, trying to grasp what we will be doing and what the market will require regarding the needs for hydrogen up to 2050. This is critical. So the scope, for instance, is mainly to understand the market needs in the path of the pipeline where the corridor is, and this is basic for the pipelines because the secret of the pipeline is scale. We need a lot of gas flowing through the pipelines in order to provide a service that is suitable and low cost for everyone. To do this, we need to understand exactly what the market needs. But I have to bear in mind that not only the volumes but also when they will come into line are important. As well, we believe that this corridor will work as a catalyst to make the market understand where are the places or where are the capacities that will be available in the future, driving indeed the future investment requirements that will be over the table to provide the market and to connect consumers and producers. Regarding this aspect, I would like also to stress that in the case of Portugal we have done the first national survey of the capacities and we've identified around 400 kilotons of H2 that is possible to provide and produce within the medium-term goals. And we are looking forward to this CFI to understand exactly what is there and what we can do to help. In a second phase, these projects will require to ask for CEF grants – CEF is the Connecting Europe Facility grant – we need help to make this viable and lower cost service to Europe. And to do that, we need in the next phase to understand and identify binding commitments, and this will probably happen during the next year. So this is also crucial for us and will derive from this CFI. I would like to finalize saying that this process is able to be delivered because the five companies present are committed and involved, fully involved in the corridor and its building, and are the best place to provide an open, transparent, and non-discriminatory solution to foster the H2 market. Because we all come from the gas system, we all understand what is required and the rules that can provide, on a regulatory environment, the solutions to bring to the market what is required as infrastructure. So I'll pass on now to my German colleague.

Yes, thank you very much. Maybe now coming from the starting point of the H2Med corridor from the Iberian Peninsula going more to the consumer perspective again, and then Germany of course is an example for that. And just want to tackle the question: why this call for interest from our perspective in Germany? We had quite a lot of surveys on national level or on federal or state level in Germany. And maybe just to give you an information to all of those who are not very familiar with those surveys we've performed, I'd like to highlight two of them. The first one is directly done for the core grid in 2021, updated in 2023, and the results are valid for the time or for the date 2032. We received 87 GW of demand. The H2Med corridor is about 8 GW of transmission capacity, meaning we have 11 times the H2Med corridor to be – yeah – of demand in Germany. That came partly from a survey and partly from political targets, so it's not 100% market-based. But also we had the result that more than half of this – so more than 40 or even 50 GW of supply from abroad – are needed, so a lot of imports are required. Then we had an update of the survey in 2024, beginning of this year, now for the first iteration of the network development plan, and in this survey we had more than 1,500 offtaker projects in Germany who participated, so really a large, large demand all across Germany, with a bit of focus to the western part maybe of Germany. And also nearly 300 production projects, but they're not in focus here – and some of them might have been double counted, but that's not the focus here. We're looking at the demand side. And it is totaling in 2030 to 40 GW and in 2032, like the survey done a few years ago, it's 70 GW, and it's purely market-based, so only market information, no political targets anymore. So it's the same magnitude as done before, and in 2035 we're going up from 70 GW up to 160 GW, so it's really an increase of the demand in Germany. So now knowing that, why another call for interest, why another survey? Very simple: in Germany we only have the domestic production and demand side; we do not know where the imports are coming from, which volumes can we expect, and where are the projects located. So we need the official knowledge what's coming from the producer side and how to match them with the demand side in Germany. That's the one thing. And the other thing is that as Pedro already mentioned, timing is of essence to really know when we have to finalize our infrastructure along the corridor and also of course in Germany as well. We need to know when it has to be there. And in Germany, this transparency is really required because we are living in this regulated regime of the network development plan, and we cannot change simply by our own ideas which pipeline has to be there at which point in time. We need clear and official market signals, and this from the German perspective is very important for us to gather this from the call for interest. So the call for interest will make H2 become reality, and that at the right time. Thanks, and there I would like to hand over to Marie-Claire to give some more details or insights.

Thank you, Nico. So indeed, your contribution, your participation to this call for interest is key. What type of information we need from you? First of all, as a user, what is your role in the hydrogen value chain – whether you are a producer, a consumer, a trader, or a shipper. Then for the producers, we would need to have information on the location of your project, the capacity of the plants, the production pathway, as well as the start date of operation and the maturity of the project, and of course the intention to book capacity on the whole corridor. Of course, let me highlight the fact that we will only publish aggregated capacity data, and that only data for interconnections will be shared among the concerned TSOs. From a consumer perspective, we would also need the type and the sector of the use of hydrogen, the consumption volumes, the location also of the plants, and the start date or the contractual period if this is possible to give this kind of information. And from a trader perspective, here again the type of activity you are doing, the volume of arrangements, as well as the contractual period. So all these information are key for us in order to have a really precise idea of the market needs and to be able to design appropriately afterwards the pipeline. Now I would hand it again to Natalia.

Thank you very much, Marie-Claire. So where we are today in the project? On the technical side, we already finalized the conceptual engineering and we are taking the first steps into the basic engineering. From financing point of view, as has been mentioned before, we already submitted our applications to get access to European funds under the Connecting Europe Facility in the chapter of energy, and the results will be announced by February next year. And in the commercial working group, we are working in this call for interest because all the data that we can get from this call for interest process will be key – it has been mentioned many times during this presentation. With this we can plan. During 2025 and 2026, we continue with the studies from the technical point of view, but also we will go into a binding open season for contracting capacities. This will allow us to be ready to take the FID – the final investment decision – on time, with the objective to be into commercial operations by 2030. So before we go into the practical aspects of this call for interest and the platform that we have developed for this purpose, I would like to invite all the participants to this webinar to type your questions, comments, or doubts. We are here for supporting you in this process, for clarifying what has not been clear enough during this presentation, and for the reason using the platform that we are now running this webinar. Please type your questions, and after the technical aspects that Noa will explain to you, we will try to answer as much as possible. If we don't have time due to time constraints to reply to those, we have the commitment from all the team to send you the answers in writing. So Noa, please.