Spanish utility Naturgy and gas system operator Enagas are joining forces to build a plant capable of making 9,000 metric tpy of clean hydrogen, a fuel that policymakers hope can help slash carbon emissions from industry.

Replete with sunny plains and well-developed gas infrastructure, Spain is keen to lead an international effort to bring down the high costs of producing hydrogen from renewable power sources.

Naturgy and Enagas said in a statement they would build a solar plant to power an electrolysis facility to split water into hydrogen and oxygen near the site of a coal-fired plant in northwestern Spain that Naturgy closed last year.

The solar facility will have 400-megawatts (MW) capacity, and the electrolyzer up to 60 MW. Spain aims to install 4 gigawatts (GW) of capacity by 2030, one tenth of the European Union's target for the entire bloc by that date.

Another Spanish utility, Iberdrola, is currently working on increasing the scope of its own hydrogen projects and is seeking European Union funds to build 800 MW of electrolysis capacity in Spain by 2027.

Naturgy and Enagas are also seeking support for their project from a $917.55-B rescue package the EU has mustered to help drag its economies out of coronavirus-induced recession. The companies did not say when the plant would be built or the size of investment.

Brussels wants member states to channel 37% of this package to projects that can help reduce greenhouse gases.