The Spanish company Iberdola and the Swedish company H2 Green Steel are working together to build massive facilities to produce “green hydrogen”. The companies said in a statement that the $ 2.3 billion electrolysis project has a capacity of one gigawatt.
Hydrogen has different uses and can be used in a wide range of industries. In addition, hydrogen can be produced in a variety of ways. One of these methods is electrolysis.
In electrolysis, water is divided into two atoms, hydrogen and oxygen. If the electricity used in this process is generated with renewable energy, it can be said that “green hydrogen” has been produced.
Green hydrogen is used in the annual production of 2 million tons of reduced iron or DRI, which is the raw material for steel production. The capacity of one gigawatt is a very large scale. According to the International Energy Agency, in 2020 the capacity of all installed electrolyzers in the world was equal to 0.3 GW.
It is likely that this facility will start production by 2025 or 2026. Iberdrola is set to generate the required renewable energy, and H2 Green Steel is responsible for the production of DRI, which covers all steel production processes.
The two companies announced that they plan to build other facilities for the production of green steel in addition to the power plant they are building, which will produce 2.5 to 5 million tons of green steel annually.
Green hydrogen is a vital technology needed to reduce carbon production in heavy industries such as steelmaking. Projects such as a partnership between the two companies could help accelerate the commercialization of larger and more complex electrolyzers and make green hydrogen competitive with other raw materials.
Reducing the environmental impact of large industries is a challenging process. Iron and steel production produce the most carbon dioxide compared to other industries and is one of the largest consumers of energy among industries. According to the International Energy Agency, iron and steel production releases 2.6 million tons of carbon dioxide into the atmosphere annually.
Currently, the steel industry is the largest consumer of coal, which produces 75% of its energy.