The plant is expected to be operational in second half of 2026. The project was presented at an official event to publicly celebrate the signing in July 2024 of the final investment decision between bp and Iberdrola.
The initiative, which includes the participation of the Technology Institute of Energy (ITE), has been awarded funding of 15 million euros from the Innovative Value Chain and Renewable Hydrogen Knowledge call of the Spanish Recovery, Transformation, and Resilience Plan, with funding allocated by NextGenerationEU of the European Union.
“This partnership with bp and our project is another step in Iberdrola's firm and real commitment to promote green hydrogen as a key vector for industrial decarbonisation” said Millán Garcia-Tola, Global Director of Hydrogen in Iberdrola. “The plant will convert 200 GWh/yr of Iberdrola’s renewable energy into green hydrogen that will contribute to bp’s decarbonisation strategy, in another example of close collaboration between both companies, reliable partners that share values as long term decarbonisation commitment. Iberdrola will apply all the experience of its existing green hydrogen plants to optimise and accelerate the development of this project.”
The 25 MW electrolyser will be powered by renewable electricity through a power purchase agreement (PPA) signed with Iberdrola that will supply 200 GWh/year coming from Iberdrola’s photovoltaic and wind projects.
The electrolyser will include 5 modules of 5 MW containerised proton exchange membrane (PEM) technology, which will be supplied by Plug Power, a leading manufacturer of green hydrogen solutions. The green hydrogen produced by the electrolysis of water powered by renewable electricity will comply with European requirements to produce green hydrogen (Renewable Fuels of Non-Biological Origin, RFNBO) and will support the transition of bp’s Castellón refinery into an integrated energy hub.
It’s expected around 2,800 annual tons of green hydrogen could substitute part of the grey hydrogen currently used by the refinery – currently produced from natural gas – and as such is expected to result in avoiding the emission of 23,000 tons of CO2 per year, equivalent to the emissions of 5,000 cars over the same period. This plant could create up to 500 new direct jobs during its construction.
“Another example of our strategic alliance with bp, uniting us to lead the future of renewable hydrogen in the Valencian region” added Mario Ruiz-Tagle, CEO of Iberdrola Spain. “Projects like Castellón show that, with the collaboration of all agents in the sector and the appropriate incentives, it is possible to develop a new industrial model based on the green hydrogen value chain. The green hydrogen economy is emissions free, electrified, attracts investment and creates quality jobs in the region. This is the true energy transition. We continue to work with committed partners to position Spain as a technological benchmark, boosting the creation of a green hydrogen industry in Europe.”
In parallel to this initial 25 MW project, bp continues to assess opportunities to increase capacity in the coming years. In subsequent phases of the project, the green hydrogen produced could also be used in key hard-to-abate industries in the Valencia region, such as the ceramics sector replacing natural gas used in its processes, in chemical industries and in heavy transport.
The launch of this project has been announced just weeks after bp signed a letter of intent with the Valencian Government to reinforce the region's position as a leader in the energy transition. The letter has materialised in the creation of a joint working committee that will serve as a platform for dialogue and collaboration between both parties and will oversee the transformation of bp's refinery in Castellón into an integrated energy hub.
In recent months, Iberdrola has closed several long-term alliances to promote the decarbonisation of the economy. Further to the joint venture with bp to accelerate the electric mobility in Spain and Portugal, Iberdrola has entered into a number of long-term partnerships with Norges Bank Investment Management, Masdar, Mapfre and Energy Infrastructure Partners to further advance the development of renewable energy, and with GIC to expand transmission networks in Brazil.
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