bp and Iberdrola have reached a final investment decision (FID) on a 25MW green hydrogen project at the British oil major’s Castellón refinery in Spain, seemingly rolling back on original plans to build an initial 200MW.
Supported by a €15m ($16.5m) subsidy, the plant could replace grey hydrogen used in the Spanish refinery, with each firm financing half of the project.
Expected to produce 2,800 tonnes of green hydrogen per year, bp says the installation could reduce 23,000 tonnes of carbon dioxide (CO2) emissions per year.
Using 25MW of Plug Power PEM electrolysers, Iberdrola will supply 200GWh per year of solar and wind energy for the installation through a power purchase agreement (PPA), the firms said.
Bp anticipates that the plant will be operational in the second half of 2026.
Describing the FID as an “important step forward” for its hydrogen business, Felipe Arbelaez, bp Senior Vice-President, Hydrogen & CCS, said “We are focused on value, progressing only the best projects in our portfolio that can create additional value through integration and fully meet our investment hurdles.”
However, under the plans initially announced last February, bp said it would build “at least” 200MW of electrolysis capacity at the Castellón refinery by 2027, with intentions of scaling up to 2GW by 2030.
Read more: bp launches plans for 2GW green hydrogen cluster in Spain
Under the HyVal initiative, the oil and gas firm planned to triple the refinery’s biofuels production, while also supplying green hydrogen to other industries in Valencia, such as ceramics, ammonia, chemicals and transport.
Now, bp has said it “continues to assess” opportunities to increase capacity “in the company years.”
H2 View has reached out to bp for confirmation on its 2GW plans for the Castellón site.
The news comes after CEO Murry Auchincloss, told investors that the firm would invest in 5-10 hydrogen and carbon capture, utilisation and storage (CCUS) projects this decade.
Read more:bp plans to invest in up to 10 hydrogen projects this decade
