bp, Iberdrola and Enagás analyse the development of the largest green hydrogen project in the Valencian Region

28 April 2021

• This project would be located at the bp refinery in Castellón, where the partners would build a 20 megawatt (MW) electrolyser powered by renewable energy produced, among other sources of generation, by a 40 MW photovoltaic plant.

• In subsequent phases, the electrolysis capacity could be increased to 115 MW, which would make it the largest hydrogen project in the refining sector in Spain.

• This project would reduce the refinery's emissions by up to 24,000 tonnes of CO2 per year, helping in the decarbonisation of the region's industrial corridor.

bp, Iberdrola and Enagás have reached an agreement to study the development of the first phase of the largest green hydrogen production project in the Valencian Community, which would be developed at bp's plant in Castellón.

The purpose of this agreement is to assess the installation of a 20 megawatt (MW) electrolyser for the generation of green hydrogen on land owned by bp in the El Serrallo industrial estate. The electrolyser would run on renewable energy produced by a 40 MW photovoltaic plant and by other sources of generation.

The bp refinery in Castellón is the largest producer and consumer of hydrogen in the Autonomous Community of Valencia. This new project would make it possible to replace grey hydrogen —which the refinery uses in its processes to produce biofuels— with green hydrogen. This would reduce CO2 emissions by up to 24,000 tonnes per year, thus having a major impact on decarbonising the plant.

The idea is also for the project to explore additional value-added uses for the green hydrogen produced, such as supplying it to the heavy transport sector and contributing to the decarbonisation of other energy-intensive industries in the area.

A project for the future

The 20 megawatt (MW) electrolyser could start operating in 2023, with an investment of approximately 90 million euros. In subsequent phases, the electrolysis capacity could be increased to 115 MW, making it the largest green hydrogen generation project in the refining sector in Spain and the most ambitious one in the Autonomous Community of Valencia.

In addition to the electrolyser, the project could be an incentive to draw estimated additional investment of around 70 million euros in new renewable energy facilities, to make a significant contribution to the economy and industry of the area, and creating high quality, value-added jobs.

bp, Iberdrola and Enagás: firm commitment to decarbonisation

Through this collaboration, bp, Iberdrola and Enagás would further develop their respective strategies for decarbonising the industrial and transport sectors in the Autonomous Community of Valencia, a region where the three companies have deep roots.

In the words of Carlos Barrasa, Chairman of bp España, “through this project bp steps up its commitment to hydrogen as a fuel of the future. Hydrogen is set to play a pivotal role in the decarbonisation of the energy, industry and transport sectors, especially those that are difficult or expensive to electrify. This is therefore another step forward in bp’s strategy to transform itself into an integrated energy company, as well as in bp España's ambition to lead the country's energy transition, so that it can become a European centre for the production and distribution of energy with a low-carbon footprint”.

Ángeles Santamaría, CEO of Iberdrola España, said that “we have the opportunity to be leaders in this technology, which will help to deliver on our commitment towards climate neutrality, by operating in sectors that are difficult to decarbonise, and boosting a sector with enormous potential for the creation of industry and jobs. The alliance between companies committed towards transforming their production processes and companies such as Iberdrola, with the capacity to generate and supply green energy, together with a chain of suppliers and incentives from European funds, will contribute to advancing the technological maturity of green hydrogen and turn it into a competitive solution for the medium-term decarbonisation of industry and heavy transport”.

In the words of Marcelino Oreja, the CEO of Enagás, “this initiative fits perfectly with the criteria followed by the projects promoted by Enagás: that they contribute to decarbonisation and a fair and inclusive transition, that they are drivers throughout their value chain, that they help the development of Spanish industry and that they generate sustainable employment. It is essential for companies, administrations and institutions to work together for these projects to become a reality, and this is a clear example of joint collaboration".

The initiative, which has the support of important local, regional, state and international public and private institutions, is aligned with the Green Hydrogen Strategy of the Autonomous Community of Valencia, as well as with the Hydrogen Roadmap of the Ministry for Ecological Transition and the Demographic Challenge. It is also part of the call for European Next Generation Funds, so it is an excellent example of its partners’ commitment towards further decarbonisation of the economy.

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