Portugal to hold its first auction for centralised purchase of biomethane and renewable hydrogen

On 11 July, Portugal's Ministry of Environment and Climate Action announced a public consultation of the first auction of the centralised purchase of biomethane and renewable hydrogen, for injection into the national gas network, reported CE NoticiasFinancieras.
The auction will last for a period of 20 days, until 31 July.
The Ministry said the auction will ensure the "first consumption response to biomethane and renewable hydrogen producers, thus encouraging investments for the implementation of the respective projects".
In a document that has already been submitted to Brussels, with the revision of the National Energy and Climate Plan (PNEC 2030), Portugal has reinforced its green hydrogen ambitions.
It aims for a considerable increase in capacity - from 2.5 GW to 5.5 GW by the end of the decade.
"New targets have been set for the renewable hydrogen industry in Portugal, aligned with the ambition of the investment projects under development in our country," said the Ministry in a statement.
"The aim is to create conditions for the installation of 5.5 GW of electrolysers by 2030, more than doubling what was initially foreseen in the National Hydrogen Strategy. It is also intended to boost the production of biomethane in Portugal, through the elaboration and implementation of the Biomethane Action Plan", it added.
This first hydrogen and biomethane auction was endorsed by the Energy Services Regulatory Authority at the end of last year, and it had already been advanced to take place in the second half of this year.
150 GWh/year of biomethane and 120 GWh/year of green hydrogen will be up for tender, in 10-year contracts and at a maximum price of €62 per MWh for biomethane and €127 per MWh for hydrogen (valid throughout the contract).
These quantities can be divided into lots, depending on the capacity of the national gas network.
The aim is to create a mechanism to support the production of gases of renewable origin or low-carbon gases, with a view to "achieving cost parity" between biomethane and hydrogen and natural gas.
To this end, the last resort supplier (CUR) in the gas sector will have the mission to purchase these new decarbonised gases from producers, in order to guarantee the minimum incorporation quotas in the national network, and will then be compensated by the Environmental Fund.
In practice, purchases and sales of renewable gases will take place through a competitive electronic auction procedure.
According to the mentioned ordinance, the date for the auction should have already been determined by the Government by June 30, although this did not happen.
Gas suppliers, whose supply to final customers exceeds 2,000 GWh per year, will also be obliged to incorporate, in volume of natural gas supplied, a percentage higher than 1% of biomethane or green hydrogen.