US power solutions company Cummins Inc (NYSE:CMI) on Monday announced it would to build a EUR-50-million (USD 61.1m) electrolyzer gigafactory in Spain and promote the green hydrogen value chain on the Iberian peninsula alongside Spanish utilities group Iberdrola SA (BME:IBE).
The company would at first assemble and test around 500 MW of proton exchange membrane (PEM) electrolyzers per year, with plans to expand the facility to over 1 GW annually.
The factory will be located in Spain’s central region of Castile-La Mancha, within Guadalajara province, where Cummins is currently in search of the site. The factory gates are expected to open in 2023, Cummins said.
The selection of Spain follows an agreement between Cummins and Iberdrola to partner on large-scale hydrogen projects in Spain and Portugal. The partnership will start with the 230-MW green hydrogen project in Palos de la Frontera, Andalusia, that Iberdrola is developing for fertiliser producer Fertiberia. In 2020, Iberdrola and Fertiberia agreed to develop up to 800 MW of electrolyzers at Fertiberia’s plants by 2027.
Cummins is to supply the electrolyzer for the Palos project, while the project itself will serve as a reference for other large electrolysis initiatives with Iberdrola, including a collaboration on a hydrogen refuelling station in Barcelona, the parties said in a joint statement.
“Our partnership with Iberdrola will connect us with a major clean energy company and strategically positions us to be a European leader in green hydrogen production," said Cummins chairman and CEO Tom Linebarger. "We believe that this is just the start of our expansion into new markets, bringing new clean technology to customers, and supporting efforts to bring the European Union’s Green Deal to fruition”.
“This initiative will accelerate the production of green hydrogen in Spain and will create a new industry, the manufacturing of electrolyzer systems, with high growth potential. We continue to make progress in our ambitious plan to put Spain and Europe at the global forefront of this technology by reducing energy dependence and fossil fuel consumption while driving the country's economic and social revitalization,” Iberdrola chairman and CEO Ignacio Galan added.
(EUR 1.0 = USD 1.221)
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