Cepsa to spend EUR 5bn on green hydrogen production in Andalusia

Spanish oil-and-gas group Cepsa today unveiled plans for a major green hydrogen hub in Andalusia with 2 GW of electrolysers and 3 GW of renewable energy plants worth a total of EUR 5 billion (USD 5.23bn).

The project, part of Cepsa’s 2030 strategy Positive Motion, will be known as the Andalusian Green Hydrogen Valley. It envisages the construction of two green hydrogen production facilities, each with an electrolyser capacity of 1 GW, in Palos de la Frontera, Huelva, next to Cepsa’s La Rabida Energy Park and at the company’s San Roque Energy Park in Cadiz. The cost of this portion of the project is estimated at EUR 3 billion.

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Together, the plants will be able to produce 300,000 tonnes of hydrogen per year to help decarbonise the energy parks in which Cepsa will be producing biofuels for aviation, maritime and heavy land transport. The Spanish group is already working on the engineering and administrative processing of the project, with the idea of launching production at the Huelva plant in 2026 and at the Cadiz facility in 2027. Full completion is scheduled for 2028.

Cepsa, owned by Abu Dhabi-based sovereign investor Mubadala Investment Co and The Carlyle Group, has set aside an additional EUR 2 billion to build the wind and solar parks that will power the green hydrogen facilities.

“This investment will help Spain achieve its goal to become an energy exporting country, with the first European green hydrogen corridor between the Campo de Gibraltar and the Dutch Port of Rotterdam,” Spanish Prime Minister Pedro Sanchez commented during the presentation of the project.

As previously announced, Cepsa and the Port of Rotterdam agreed to move green hydrogen across a corridor from southern Spain to northern Europe.

(EUR 1 = USD 1.045)