(Bilbao, Spain) – Spanish energy company Iberdrola SA and energy giant BP have announced the start of construction on a hydrogen production plant. The joint venture, named "Castellón Green Hydrogen SL," will be located at the BP refinery in Castellón, Spain. Production is scheduled to begin in the second quarter of this year. The companies made the investment decision last September ( as previously reported ).
Iberdrola SA and BP have announced the start of construction of the green hydrogen production plant in Castellón, Spain. © Iberdrola SA
First, a 20.000 square meter plot of land next to the refinery will be developed, then civil engineering work will begin. The main equipment will then be delivered, including electrolyzers with a cumulative capacity of 25 megawatts. According to information from September, five proton exchange membrane (PEM) modules with an output of five megawatts each will be installed in container construction by the US manufacturer Plug Power Inc. A power purchase agreement (PPA) with Iberdrola España provides for the supply of 200 gigawatt hours per year from photovoltaic and wind power projects. All EU requirements will be met "to ensure that the hydrogen produced is green hydrogen," says Jorge Palomar Herrero, Director of Hydrogen Development at Iberdrola.
Green hydrogen to replace natural gas
"The BP refinery in Castellón is consolidating itself as a model for the transformation of refineries into integrated energy centers," says Carolina Mesa, BP's vice president for hydrogen in Spain. The group wants to use the annual yield of around 2.800 tons of green hydrogen to replace part of the hydrogen produced from natural gas that is currently used by the refinery. In later phases of the project, the energy source could also be used in key industries that are difficult to decarbonize in the Valencian Community, such as the ceramics industry, the chemical industry and heavy goods transport.
Location of the refinery in the south of Spain in Castellón, Valencian Community. © BP plc
The investment costs are estimated at 70 million euros, of which 15 million come from the Spanish economic stimulus package (Plan de Reconstrucción, Transformation y Resilience). The plant will create up to 500 new jobs during the construction phase, with around 25 Spanish companies involved. Commissioning is scheduled for the second half of 2026.
In 2023, BP announced its intention to gradually develop two gigawatts of electrolysis capacity in the Valencia region by 2030 to produce green hydrogen. Investments were projected at two billion euros. The first phase of construction involved expanding electrolysis capacity at the Castellón refinery to 200 megawatts by 2027.
Photo above
The "Castellón Green Hydrogen" joint venture between Iberdrola and BP is scheduled to begin construction of the 25 MW electrolysis plant in Castellón in the second quarter of this year. © BP plc
