H2 Green Steel and Iberdrola Plan Green Hydrogen Project

5th December 2021: Sweden’s H2 Green Steel and Spain’s Iberdrola announced that they are looking forward to join hands for developing a new state-of-the-art facility for producing green hydrogen in Europe. This development would set an ideal example of how many companies nowadays are shaping the bright future of the energy and power sector.

Both companies declared that approximately USD 2.6 billion (2.3 billion euro) will be spent on the development of this novel project. The newly developed green hydrogen facility will consist of an electrolysis capacity of 1 gigawatt. The entire financing will come from a combination of public funding, green project financing, and equity.

Hydrogen has a wide range of applications, such as fertilizer production, petroleum refining, semiconductor manufacturing, glass purification, heat-treating metals, power plant generators, pharmaceuticals, and many others. It can also be used in a large number of industries, as well as produced by utilizing various techniques.

The development of green hydrogen by H2 Green Steel and Iberdrola will be further used to generate roughly around 2 million tons of Direct Reduced Iron (DRI) every year. It would be utilized for producing steel. The scale of this new project is significant at 1 GW. According to the International Energy Agency (IEA), in 2020, the total installed electrolyzer capacity stood at just 0.3 GW worldwide.

Moreover, H2 Green Steel and Iberdrola mentioned that the new facility will be located on the Iberian Peninsula, however, no specific location has been revealed yet. The facility is likely to start production by 2025 or 2026. Both companies are also looking forward to explore more opportunities to co-locate a unique green steel production facility which will be capable of producing 2.5-5 million tons of green flat steel in conjunction with the plant annually.

The electrolyzer will be operated by both H2 Green Steel and Iberdrola and co-owned. H2 Green Steel will be operating and owning DRI production, including those processors connected to downstream steel production, while Iberdrola will be supplying renewable energy to the site.

According to Iberdrola’s liberalized business director Aitor Moso, green hydrogen is expected to be an important technology for the purpose of decarbonizing heavy industrial processes such as steel production. This new project that the company is planning to initiate with H2 Green Steel would aid both of them in making green hydrogen more competitive. At the same time, it would enable these companies to accelerate the commercialization of more sophisticated and larger electrolyzers.

As per the IEA, environmental footprint of intensive industrial processes must be reduced, owing to high pollution rate and global warming across the globe. The iron and steel industry has achieved the first place among heavy industries when it comes to emission of carbon dioxide. In terms of energy consumption, it stands at the second place. The agency further stated that the iron and steel industry alone is responsible for creating 2.6 gigatonnes of carbon dioxide emissions every year. Also, at present, the steel industry is considered the largest consumer of coal. It provides approximately 75% of its total energy demand.

Green hydrogen has been a major topic of innovation over the last few years, and various companies are investing huge sums to create new projects revolving around the same. Fortescue Future Industries, for instance, mentioned that it is set to become the largest supplier of green hydrogen in the United Kingdom in November 2021. The company also signed a memorandum of understanding with Ryze Hydrogen and JCB.

Similarly, in October the same year, Siemens Energy mentioned that currently, there is no commercial case for green hydrogen, which, in turn, may become a major obstacle for the industry. In today’s world, hydrogen is considered a niche that needs rapid development for commercialization. Though this shift could take more than ten years, companies like H2 Green Steel and Iberdrola are striving persistently to make this development quicker.

By Ulhas