Lhyfe, Capital Energy Eye Green Hydrogen Opportunities Offshore Iberian Peninsula

Outlook & Strategy

June 12, 2023, by Adnan Memija

Lhyfe and Capital Energy have signed a collaboration agreement for the joint development of offshore renewable hydrogen projects in Spain and Portugal.

Under the agreement, the two companies will work together to create hydrogen production sites at some of the offshore wind farm sites currently being developed by Capital Energy.

The Spanish energy company already has a development pipeline of more than 7.5 GW in both countries.

The joint installation of offshore wind farms and hydrogen production sites would benefit Lhyfe and Capital Energy, mainly in two key areas: economic benefits through the economies of scale achieved, and social benefits through the growing industrial overlap of the projects, given that a greater number and variety of suppliers and specialists will be required, according to the press release.

“Through this alliance, we intend to use some of the energy generated by our offshore wind farms to produce hydrogen, which will help to drive the energy transition in a balanced way and solve potential bottlenecks in the electricity system. It will also increase the socio-economic benefits of our offshore projects, with greater investment and more skilled jobs,” said Pablo Alcón, Offshore Director at Capital Energy.

Such initiatives could also benefit the energy system as the wind energy produced in offshore wind farms would be more controllable, avoiding curtailments, the partners said. In some cases, it would be possible to send less power to the grid (e.g. in case of congestion of the grid) and more to the hydrogen production unit, to which some of the wind turbines would be directly connected.

The collaboration agreement signed between Capital Energy and Lhyfe could be extended to other markets in the future, the two companies said.

In September of last year in the Saint-Nazaire dock basins, Lhyfe launched its Sealhyfe project to deliver the world’s first offshore renewable hydrogen production prototype, which will have a capacity of 1 MW and will be connected to a floating wind turbine.

The company aims to have 200 MW of green hydrogen production capacity by the end of 2026 and 3 GW by the end of 2030.

Spain has set a 2030 offshore wind target of 3 GW through its Offshore Wind Roadmap, approved by the country’s Council of Ministers in December 2021.

On the other hand, the Portuguese Government announced in January a target to award 10 GW of offshore wind capacity by 2030, with the majority expected to be floating wind sites.

“Producing H2 via electrolysis at sea will maximise the immense potential of offshore wind energy. Countries with a coastline, such as Spain and Portugal, can drastically reduce their dependence on fossil fuels and improve their national energy security, while producing net-zero emissions and boosting local economies,” said Taia Kronborg, Chief Business Officer at Lhyfe.