Spain's integrated Cepsa is planning to invest €3bn ($3.1bn) in 2GW equivalent of green hydrogen (H2) production in southern Spain by 2030.
The company plans to install 1GW hydrogen production facilities at its 220,000 b/d Huelva and 244,000 b/d Algeciras refineries and petrochemicals complexes. It is currently working on the engineering and administrative approval for the projects.
Cepsa is projecting a further €2bn investment in developing 3GW of solar and wind generation capacity to power the H2 plants, as part of its Andalusian Green Hydrogen Valley initiative.
"The scaled-up production will be a vital contribution to the energy transition and security of supply of the continent," Cepsa chief executive Maarten Wetselaar said.
Cepsa has not ruled out developing steam reforming of biomethane as well as electrolysis to achieve the 2GW target of green H2 production by 2030, but the 3GW of renewables capacity included in its hydrogen plan suggest that any steam reforming will be restricted to use as a back-up capacity to balance H2 production by electrolysis, when wind and solar resources are low.
The H2 plants will be developed in stages with the first kilowatt of commercial hydrogen production expected online at the Huelva site in 2026 and at Algeciras in 2027.
Huelva is expected to reach 1GW capacity in 2028 while Algeciras' 1GW will be completed by 2030, when the plants should be producing a combined 300,000 t/yr of green H2, accounting for half of the production capacity.
Cepsa told Argus that the first units to be installed in Huelva in 2026 will have 400-500MW of green hydrogen electrolysis capacity.
The green hydrogen and related renewables investments take up the lion's share of the €8bn Cepsa plans to invest to 2030 as part of its Positive Motion strategy to cut scope 1 and 2 carbon dioxide emissions by 55pc and achieve a 20pc reduction in scope 3 emissions by the end of the decade.
Cepsa focused largely on converting its own refineries into clean "energy parks" through the production of low and zero carbon fuels and supplying businesses with solutions such as green H2 and renewable energy.
The company signed an initial agreement with the port of Rotterdam in October to create a corridor for exporting the green H2 it produces to northern Europe. It is planning to have 2.5mn t/y of biofuels capacity, including 800,000 t/yr of sustainable aviation fuel (SAF) production, operating by 2030.
Cepsa's planned green hydrogen capacity is also key to its strategy of maintaining dominance over Spain's marine fuels market, where it is the country's largest supplier. Green ammonia and methanol production will be produced at the sites and distributed through major Spanish ports, according to the company.
Construction of the hydrogen plants and renewables capacity is expected to start next year and a final investment decision (FID) is imminent.
