MADRID (Dispatches) - Spanish power company Iberdrola and Sweden’s H2 Green Steel are to partner and develop a major facility that will produce green hydrogen, in yet another example of how companies are taking an interest in the much talked about sector.
In an announcement on Thursday, the firms said the 2.3 billion euro ($2.6 billion) project would see them set up a green hydrogen facility with an electrolysis capacity of 1 gigawatt. Financing will come from a mixture of equity, green project financing and public funding.
Hydrogen, which has a diverse range of applications and can be deployed in a wide range of industries, can be produced in a number of ways.
One method includes using electrolysis, with an electric current splitting water into oxygen and hydrogen. If the electricity used in this process comes from a renewable source such as wind or solar then some call it green or renewable hydrogen.
The idea is that the green hydrogen from the Iberdrola and H2 Green Steel development will be utilized to generate roughly 2 million tons of direct reduced iron, or DRI, each year, which can then be used to produce steel.
At 1 GW, the scale of the project is significant: according to the International Energy Agency, global installed electrolyzer capacity stood at just 0.3 GW in 2020.
The development by Iberdrola and H2 Green Steel will be situated on the Iberian Peninsula — no specific location has been announced yet — and is slated to commence production in 2025 or 2026.
The electrolyzer itself will be co-owned and operated by the two companies. Iberdrola will provide renewable energy to the site, with H2 Green Steel owning and operating DRI production, including any processes connected to downstream steel production.