Iibedrola Tower in Bilbao, Spain.
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Spanish power company Eberdrola and Swedish H2 Green Steel are set to build a major hydrogen power plant.
In a statement issued on Thursday, the companies said they would set up a 2.3 billion euro ($ 2.6 billion) project to build a 1-megawatt green hydrogen facility. Finance comes from a combination of equity, green project finance and public funding.
Hydrogen can be produced in a variety of ways, with a wide range of applications and applications in a variety of industries.
One method involves the use of electrolysis, which converts water into oxygen and hydrogen by electric current. If the electricity used in this process comes from renewable sources such as wind or sun, some call it green or renewable hydrogen.
The idea is that green hydrogen from ibidrola and H2 green steels will be used to generate an estimated 2 million tons of reduced iron or DRI each year, which could be used to produce iron.
At 1 GW, the project scale is high, according to the International Energy Agency, according to the International Energy Agency.
The development of Iberdrola and H2 Green Steel is located on the Iberian Peninsula – no specific location has been identified yet – and production will begin in 2025 or 2026.
The electrolyzer itself is owned and operated by both companies. Iberdrola provides renewable energy to the station H2 Green Steel owns and operates the DRI product, including any processes associated with the lower steel production.
“The companies are looking for an opportunity to build a green steel plant that can produce 2.5-5 million tons of green metal annually in collaboration with the factory,” he said.
“Green Hydrogen is an important technology in carbon offsetting industrial processes, such as metallurgy,” said Itor Mosso, director of Iberdrola Free Trade.
Projects with H2 Green Steel, as planned, will “help market larger and more sophisticated electrolytes, making green hydrogen more competitive,” Moso said.
Reducing the environmental impact of consolidated industrial processes is a major challenge.
“Among the heavy industries, the metallurgical and metallurgical sector ranks first in terms of carbon dioxide emissions and the second in terms of energy consumption,” the IAA said.
“The steel industry is currently the largest consumer of coal, accounting for 75% of its energy demand,” he said.
We hope for hydrogen, but so do obstacles
Over the past few years, several major businesses have been involved in green hydrogen projects.
For example, the Australian headquarters of Fortesquue Future Industries, headquartered in Australia, announced in November that it would become the UK’s largest supplier of green hydrogen after a memorandum of understanding with JCB and Ryze Hydrogen.
In the same month, Norsk Hydro and Oil Shell announced the potential of joint projects focused on green hydrogen production.
While there is great potential for green hydrogen, there are obstacles to overcome.
In October, Simmons Energy chief executive told CNBC there was “no business case” at the moment.
In a discussion at the CNBC Sustainable Future Forum, Christian Bright listed a number of areas that need attention in promoting green hydrogen.
“We need to define this technology and these issues for commercial use,” Brich told CNBC’s Steve Sedgik. “And we want an environment, clear, cheap electricity and, in this case, an abundance of renewable energy available to do that.” This has not happened yet, he argued.
A few months ago, in July, Enel CEO Francesco Starce said, “There is no capital competition between hydrogen and renewable energy.”
“Hydrogen is a good place to be today, and it needs to be commercially viable and competitive,” he said, noting that such a change could take up to 10 years.