MOSCOW (MRC) -- BP announced on 28 February that the company was set to launch a renewable hydrogen cluster in the Valencia region, HyVal, at its Castellon refinery where biofuel production would increase, said the company.
BP is set to develop 2GW of electrolyser capacity at Castellon, which is forecast to be completed by 2030. Furthermore, BP said in a press release that biofuel production at the Castellon refinery would triple to 650,000 tonnes/year by the end of the decade with the hydrogen produced via electrolysis replacing its unabated hydrogen production currently located at the site.
The renewable hydrogen produced would be used as a feedstock in the biofuel production process, specifically for the production of sustainable aviation fuel (SAF), in addition to being used close to the site by the ceramic industry and the chemicals industry. In total, BP is set to invest EUR2 billion into the project.
The first phase will see at least 200MW of capacity electrolysis plant being installed at Castellon by 2027, expected to produce up to 31,200 tonnes/year of renewable hydrogen. The second phase will see capacity rise to as much as 2GW by 2030, with the electricity set to come from renewable generation assets (wind and solar) located near the site.
Spain has ambitions of being a net exporter of renewable hydrogen in the coming years, and the BP announcement follows on from several others surrounding investment in the country so far in 2023. Cepsa in February signed a deal with Fertiberia to boost renewable hydrogen production in Huelva as well as signing a memorandum of understanding (MoU) with ACE Terminal for the export of renewable ammonia from 2027, in addition to the Spanish and Dutch governments agreeing to cooperate more in the field of renewable hydrogen and hydrogen corridors.
The H2Med pipeline is set to move as much as 2 million tonnes/year of renewable hydrogen between Portugal, Spain, France, and Germany and is expected to become operational in 2030. In the country's hydrogen strategy, Spain is aiming for at least 4GW of electrolyser capacity by 2030 in addition to 25% of hydrogen consumption in industry to be renewable by 2030 as both a raw material and as an energy source.
Data from ICIS Power Horizon Forecast showed that hydrogen demand in Spain was forecast to increase from 18TWh in 2023 to 25TWh by 2030 against a production capacity of 23TWh, of which 16TWh is expected to be electrolyser capacity.
We remind, British energy company BP said it would invest nearly USD2 billion to develop a hydrogen hub in the Valencia region of Spain using its Castellon refinery as a foundation. BP unveiled plans to build up its electrolysis capacity at Castellon to produce so-called green hydrogen. Hydrogen production is described using a color spectrum and the most common form in use today is grey hydrogen, which splits methane (CH4) into its elemental components of carbon and hydrogen.