December 6, 2021: -Spanish power company Iberdrola and Sweden’s H2 Green Steel are to partner and develop a significant facility that will produce green hydrogen, in yet one more example of how companies are interested in the talked about the sector.

On Thursday, the firms said the 2.3-billion-euro ($2.6 billion) project would see them set up a green hydrogen facility with an electrolysis capacity of 1 gigawatt. Financing comes from a mixture of equity, green project financing, and public funding.

Hydrogen, having a diverse range of applications and can be deployed in various industries, can be produced in several ways.

One method includes electrolysis, with electric current splitting water into oxygen and hydrogen. If the electricity used in this process comes from a renewable source like wind or solar, some call it green or renewable hydrogen.

The green hydrogen from the Iberdrola and H2 Green Steel development will be utilized, generating 2 million tons of direct reduced iron or DRI, which can then be used to produce steel.

At 1 GW, the scale of the project is significant; according to the International Energy Agency, global installed electrolyzer capacity stood 0.3 GW in 2020.

The development by Iberdrola and H2 Green Steel will be situated on the Iberian Peninsula and is slated to commence production by 2026.

The electrolyzer will be co-owned and operated by different companies. Iberdrola provides renewable energy to the site, with H2 Green Steel owning and operating DRI production, which includes any processes connected to downstream steel production.

The businesses said they would “explore the opportunity to co-locate a Green Steel production facility capable of producing 2.5-5 million tons of Green flat steel annually, in conjunction with the plant.”

In a statement, Aitor Moso, Iberdrola’s liberalized business director, said green hydrogen would be “a critical technology in the decarbonization of heavy industrial processes such as steel production.”

Projects like the one being planned with H2 Green Steel would Moso said, “help to speed-up the commercialization of more sophisticated electrolyzers, making green hydrogen more competitive.”