Iberdrola takes another step in the direction of decarbonization. Iberdrola and H2 Green Steel have agreed to create a green hydrogen plant with a 1,000 MW installed capacity and a 2.3 billion euro investment.
The new factory will use clean fuel to power a direct steel reduction furnace that can manufacture about 2 million tonnes of pure green steel per year while reducing CO2 emissions by 95 percent.
The facility will be on the Iberian Peninsula, where a number of potential locations are being considered, with production set to begin in 2025 or 2026. All of the areas that H2 Green Steel and Iberdrola are looking into will have renewable energy as well as all of the infrastructure needed to run a successful hydrogen, green steel firm.
“We are honored and thrilled to work with Iberdrola to expand green steel production. The transformation of heavy industry to more sustainable modes of operation will require large-scale green hydrogen production. We are pursuing a genuinely global and unique approach to green hydrogen production by sharing the shared aim of decreasing emissions in hard-to-decarbonize industries, starting with steel in Europe. Iberdrola contributes essential knowledge, technology, and know-how to our green steel initiatives, allowing us to scale them up “H2 Green Steel’s CEO, Henrik Henriksson, adds
“Green hydrogen will be an important technology for decarbonizing large industrial processes like steel production. This and other innovative research will assist to speed the commercialization of larger and more complex electrolysers, making green hydrogen more competitive. The Iberian Peninsula can play a crucial role in Europe gaining a global lead in the development of this green technology, thanks to low-cost renewable energy supplies and a highly skilled workforce “Iberdrola’s director of deregulated business, Aitor Moso, agrees.
The two firms have agreed to construct a green hydrogen plant with a 1 GW electrolysis capacity and a steel ore reduction process that can produce about 2 million tonnes of green steel ore per year. Iberdrola and H2 Green Steel will jointly operate the electrolyser. Iberdrola will provide renewable energy to the factory, while H2 Green Steel will operate and own the green molten steel manufacturing and all downstream metallurgical operations. Both firms will also look into the feasibility of building a steelmaking factory on the same site that can produce between 2.5 and 5 million tonnes of green steel plate per year.
“The project in Boden, Sweden, has demonstrated that there is a considerable demand for green steel from a wide range of customers. Our Boden platform, infrastructure, and project execution will all benefit from our relationship with Iberdrola. We will have a stronger influence, be closer to customers, and be able to service the need of a rising market with two European locations. We’re building a bigger European platform for the green hydrogen economy with Iberdrola “H2 Green Steel’s EVP Head of Business Unit Hydrogen, Kajsa Ryttberg-Wallgren, agrees.
The project will be funded with a mix of public funding, green project financing mechanisms, and private monies. The large-scale production of green hydrogen, which would cost around €2 billion, will help heavy industries migrate to more sustainable operations.
“The collaboration with H2 Green Steel adds to our global network of collaborations aimed at maximizing the benefits of green hydrogen. Fertilizer manufacturers, oil refineries, transportation companies, and even whisky distilleries are among our clients. In many industrial sectors, the task of reaching zero emissions necessitates both vision and action. Companies continue to demonstrate that they have the necessary ambition by developing green hydrogen “Iberdrola’s Global Head of Hydrogen, Millán Garca-Tola, agrees.
The joint venture was formed as a result of relationships made possible by the European CEO Alliance project, which brought together H2 Green Steel and Iberdrola with other companies to work toward a zero-carbon future and a more resilient and sustainable Europe. In line with the European Green Deal, the CEO Alliance promotes decarbonisation initiatives by identifying prospective collaborations, supporting green investments, and implementing projects that advance the development of sustainable economies and communities.
Decarbonization of the steel sector represents a significant development opportunity for Iberdrola, as it may result in an additional demand of roughly 5,000 TWh/year, or nearly twice the existing electricity generation capacity in Europe, as well as 40 million tonnes of green hydrogen. As a result, the company is speeding up the implementation of the full hydrogen value chain.
Steelmaking can be decarbonized in the end, and there are already a few interesting options, such as direct electrification or green hydrogen. Green steel may become more competitive as a result of predicted cost reductions from renewables and green hydrogen driven by Iberdrola, to the advantage of all consumers.
