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What is driving Hera’s interest in developing a project focused on hydrogen production?
It is worth remembering, before anything else, that hydrogen is the most abundant element in the Universe. However, on Planet Earth it is not found in its pure form: it must be produced. Although it is not yet clear just how far the use of this energy carrier will extend in the future energy system, we are confident that it has all the potential to play an important role.

Wherever Hera sees opportunities, it always
seeks to assess them and, in the right
circumstances, seize them early on. We want
to be present in the hydrogen business
because we see the potential for a major
opportunity there.

Did you decide to make this investment considering the potential long-term developments in green hydrogen?
Not only. We have also considered short-term needs, such as those of local public transport - especially buses. These vehicles are, or will need to be, powered by green hydrogen, meaning hydrogen produced using renewable energy, so that they can benefit from the decarbonisation of their emissions, at the same time providing a service that will result in being more sustainable and, perhaps, even more competitive.

Regardless of future energy scenarios, from
our perspective, there are already real
business opportunities available in the short term.

What led you to focus specifically on hydrogen production, rather than other alternative energy sources?
First, at Hera, we have expertise in complex plant engineering - think of water treatment plants or waste treatment facilities… We also have extensive experience in methane transportation and distribution: expertise that is undoubtedly valuable when it comes to managing hydrogen, which exists in gaseous form at room temperature and atmospheric pressure.
A second aspect that represents an advantage for Hera is the presence of synergies with activities in which the Company is already operating today: for example, the production of electricity from photovoltaic systems to power green hydrogen production, or water treatment processes, which make it possible to reuse the oxygen generated during hydrogen production through water electrolysis. Also from a synergy perspective, we should bear in mind that in Castelfranco Emilia, in a section of our distribution network, we have successfully completed a trial involving the injection of a methane-hydrogen blend containing up to 10% hydrogen. Therefore, we can also rely on extensive know-how and pioneering expertise in the distribution of new gases.
We are also evaluating the development of network sections dedicated exclusively to hydrogen transport, with the aim of connecting production sites to consumption hubs. Hydrogen pipelines require management processes very similar to those used for methane distribution networks: thus, when users begin to demand large quantities of green hydrogen, we will be ready to develop and manage dedicated infrastructures.

To wrap it up, in addition to the opportunities
presented by the short-, medium-, and long-
term outlook, at Hera we can rely on specific
expertise and several potential synergies
among the different activities in our business
portfolio, which make it attractive for us to
start hydrogen production right away.
We also have a deep interest in everything that
promotes sustainability.

As a matter of fact, our production plant in Modena is built on a brownfield site, which is thus being redeveloped. Furthermore, much of the energy required will be generated by a solar power plant built on an adjacent closed landfill: we are therefore giving dismissed land a new life, while optimising the use of the soil.

When did you start working on this project?
We began to analyse and design this opportunity in 2022, when we had a real chance to take advantage of the call for proposal included in the National Plan for Recovery and Resilience, or the PNRR, specifically dedicated to the production of green hydrogen on decommissioned industrial sites. Between 2023 and 2024, our project secured the entire funding allocated to the Emilia-Romagna region and was therefore launched. The plant will be completed very shortly, by June 2026: so, we will start producing green hydrogen already in the second half of the year. Hera is leading the initiative; we also have a partner, Snam, who was in charge for designing and building the production plant's platform.

What returns are expected from this investment?
The project involves investments of approximately 27 million euro, of which around 20 million euro are covered by PNRR funding. The expected returns appear attractive overall, also considering the incentives for green hydrogen production planned by the Italian Government and expected to be published shortly. Italy has in fact unlocked 6 billion euro in funding through 2029, approved by the European Commission in March 2026, as part of a plan aimed at supporting the production of 200,000 tonnes of renewable hydrogen per year to facilitate the decarbonisation of industrial and transport sectors.

We expect that the production for the public
transport will be particularly profitable, as it
will enable the replacement of diesel, against
which green hydrogen is already competitive.

These are certainly attractive returns, higher than those we achieve in regulated services.

Which positive impacts do you expect on Hera from the direct involvement in green hydrogen production?
First of all, let’s keep in mind that Hera Group also has another plant under construction dedicated to the production of green hydrogen: it is in Trieste and is another investment that has benefited from PNRR funding. By combining the experience of the Trieste Hydrogen Valley with that of the Modena Hydrogen Valley - as we like to call them, with a touch of pride - we believe we may soon be able to develop a further green hydrogen production plant near the Ravenna industrial hub, as soon as economic conditions make it viable. To be strategically located, these plants may be close to companies that wish to use green hydrogen to accelerate the decarbonisation of their industrial processes. For example, for the Modena plant we are already in very advanced talks with the automotive industry.
In addition, in the surroundings of our facility, the municipalities of Modena, Ferrara, and Bologna have already planned to purchase over 150 hydrogen-powered buses, which will result in significant reductions in CO2 emissions: each bus is expected to avoid the emission of approximately 50 tonnes of CO2 per year when powered by green hydrogen.

What is the innovative scope of these green hydrogen production projects?

The real innovation in this case lies in the way
we use a combination of existing technologies
to carry out the production.

Electricity generation from photovoltaic systems is already widely established, electrolysers for hydrogen production have existed for decades, as have compressors and other technologies… but the way we combine all these elements to produce hydrogen sustainably is entirely new.

Any other innovative aspects of the IdrogeMO initiative?
We should also take into account the innovative aspect of the project in terms of regeneration of the area. This decommissioned industrial site in the Modena area serves as a model of excellence in the energy transition, due to the hydrogen produced, but also in the circular economy, when considering the paper and plastic sorting facility located on-site.
We have also set a positive example for biodiversity protection, given that the former landfill site has been transformed into a nature park visited by school groups, a nature reserve that features a pond inhabited by swans and is home to some lynxes.
One last innovative aspect I’d like to mention, looking ahead, concerns hydrogen as a solution for energy storage. It could help us get through periods of energy crisis, such as the one we are currently experiencing, by producing hydrogen and then getting electricity at other times, weeks or months later: hydrogen could help overcome the limitations we currently face when storing electricity in batteries, which, unlike hydrogen, need to be discharged within a short period of time.

We have therefore opened a new front that can
lead Hera to play an increasingly important
role as enabler of the energy transition.

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