BP's green hydrogen pilot at Spanish refinery in limbo as key agreements yet unsigned
A joint venture with Iberdrola is still to be confirmed, while 25MW electrolyser’s construction has been delayed by a year
Oil major BP was due to start up a pilot electrolyser in Spain at the Castellón refinery this year as part of a wider partnership with utility Iberdrola, with plans for another 200MW of electrolysis capacity by 2027 and 2GW by 2030 to form the “HyVal” hub.
But according to local reports, construction on the first project may not even be finished by the end of 2025 — and the joint venture with Iberdrola is still in the process of being defined despite being announced more than a year ago.
BP first announced it would set up a joint venture with Iberdrola to co-develop 6GW of green hydrogen capacity in July 2022, specifying that a previously announced 20MW electrolyser pilot at Castellón would be built under this new partnership.
However, while the oil major had since announced its plans for the HyVal hub in February this year, it seemed to have quietly dropped the suggestion that all future hydrogen projects would be co-developed under the partnership.
And BP has confirmed to local newspaper Castellón Plaza that in addition to the joint venture still in the process of “just being defined”, work on the refinery’s first electrolyser, now expected to be 25MW, will start “in 2024 and will be underway at the end of 2025”.
The company has not yet confirmed whether it has chosen an electrolyser supplier or how it will source electricity for the pilot.
While the oil and gas giant had floated in November last year that the electrolyser could be increased in size to 60MW to compensate for delays, it is still unknown whether this capacity expansion will go forward.
If it is still 25MW, the pilot is estimated to only reduce CO2 emissions by 39,000 tonnes, equivalent to just 3.25% of the refinery’s 1.2 million tonnes of CO2 emitted per year.
The expansion of electrolysis capacity to 200MW, capable of producing 31,200 tonnes of renewable H2 per year, is expected to cover the full grey hydrogen demand of the refinery.
BP calculates that this would avoid 300,000 tonnes of CO2 emissions — although this is still only a quarter of the Castellón complex’s carbon footprint.
BP’s HyVal cluster is expected to scale up to 2GW of H2 production capacity by 2030, with the ambition of supplying nearby local industries such as ceramics with hydrogen to replace natural gas as well as exporting volumes via the proposed H2Med pipeline from Spain and Portugal to France and Germany.
Hydrogen Insight has reached out to BP and Ibderdrola for more details on the Castellón projects and wider joint venture.