- The 300 MW Onuba project is among the largest European electrolysis developments to reach construction.
- More than €300 million of public funding and captive demand at Moeve’s industrial complex underpin the investment.
- High gas prices have temporarily improved green hydrogen’s competitiveness, but the project’s more durable advantage is integration with fuels and industry.
Spanish energy company Moeve has begun construction of a €1 billion green hydrogen project in Huelva, providing a rare European example of a large electrolyser moving beyond announcements and final investment decision.
Onuba, the first phase of the Andalusian Green Hydrogen Valley, will initially contain 300 MW of electrolysis capacity, with an option to add 105 MW. It is designed to produce around 45,000 tonnes of renewable hydrogen annually.
Moeve approved the final investment decision in March and has contracted Thyssenkrupp Nucera to supply 15 standardised 20 MW alkaline electrolysis units. Construction was formally launched at Palos de la Frontera on 17 September.
“Today, we are turning the page on green hydrogen pilot projects towards the chapter of large-scale construction,” said Moeve chief executive Maarten Wetselaar.
New shareholders
Moeve retains 51% of Onuba. Hydrogen investment manager Hy24 and Spanish public-private finance institution COFIDES have acquired a combined 29%, while Enagás Renovable and solar developer Alter Enersun jointly hold the remaining 20%.
The European Union has designated the development a Project of Common Interest. It has secured €304 million from Spain’s EU-financed Recovery, Transformation and Resilience Plan, meaning public funding is equivalent to approximately 30% of the announced investment.
The spending figure includes associated infrastructure and a dedicated photovoltaic plant. Moeve estimates the project will support more than 8,000 direct, indirect and induced jobs across development, construction and commissioning, as well as activity for more than 400 local small businesses.
The hydrogen will principally support lower-carbon fuels for road transport, aviation and shipping, while replacing fossil-derived hydrogen in industrial processes. Moeve estimates annual emissions savings of about 250,000 tonnes of carbon dioxide.
Onuba sits alongside a second-generation biofuels facility within a combined €2.4 billion programme at Huelva. This co-location provides something many proposed hydrogen developments lack: existing industrial demand, energy infrastructure and a route for converting hydrogen into saleable fuels.
Four layers of support
“Right now, green hydrogen is competitive with grey hydrogen because the natural gas price is very high,” Wetselaar told reporters at the groundbreaking ceremony.
Although encouraging, that sentiment also exposes a fundamental weakness in the wider hydrogen market. Competitiveness created by geopolitical gas price shocks can disappear if fossil fuel prices retreat; indeed, industrial assets cannot be financed over decades solely based on today’s unusually favourable spread.
Onuba’s investment case instead combines four layers of support: low-cost southern European solar power, substantial grant funding, on-site demand and regulatory requirements for renewable fuels. The participation of Hy24 and COFIDES spreads the remaining financing and execution risk.
The project is intended to anchor a much larger 2 GW hydrogen valley spanning Moeve’s Huelva and San Roque energy parks. But the 300 MW first phase should be treated as the firm development; the remaining capacity is an ambition rather than a committed construction programme.
For the UK, Onuba sharpens the strategic choice between domestic hydrogen production and imported molecules. British projects may offer proximity to industrial clusters and offshore wind, but southern Spain has superior solar yields, suitable land and established ports. Hydrogen or its derivatives could therefore be produced more cheaply in Iberia and shipped north.
Britain’s hydrogen-support mechanisms must consequently reward projects that provide genuine system or industrial value, not simply domestic electrolysis capacity. Clusters with firm offtake, shared infrastructure and access to renewable power will be better positioned than projects relying on an as-yet undeveloped merchant hydrogen market.
Onuba does not demonstrate that unsubsidised green hydrogen has arrived. It demonstrates that large projects can proceed when production, demand, public finance and industrial strategy are built together.
