Production

EU-backed Catalina green hydrogen project budget rises by nearly €300m amid change of plans

Copenhagen Infrastructure Partners has revised its cost estimate for the 500MW project in order to connect it to planned Spanish H2 network

Søren Toftgaard, Energy Transition Fund lead for CIP.
Søren Toftgaard, Energy Transition Fund lead for CIP.Photo: CIP
Senior Reporter

Renewables investor Copenhagen Infrastructure Partners (CIP) has increased the estimated cost of its Catalina project in northeastern Spain by €285m ($317m), as a result of extra investment into pipelines and compressors to link up to the pan-national Spanish Hydrogen Backbone pipeline network.

Catalina, to be sited in the municipality of Andorra in the autonomous Aragon region, is planned to house 500MW of electrolyser capacity in its first phase, with a start of commercial operations in the last quarter of 2029.

Last year, the regional government of Aragon approved CIP’s proposed investment of more than €1.8bn, of which €714m was allocated for electrolysers and €1.1bn for new wind and solar assets.

The original proposal had included a direct pipeline connection to its offtaker and consortium partner Fertiberia’s ammonia fertiliser plant in Sagunto in the neighbouring province of Valencia, to be built by Spanish gas pipeline operator and fellow project partner Enagás.

However, in the time since the original investments were approved by the Aragon government, there has been significant progress in both the Catalina project and the Spanish Hydrogen Backbone, a planned network of H2 pipelines to be built across the country by Enagás and due for completion by 2030.

The European Commission included this pipeline infrastructure in its sixth list of Projects of Common Interest, signed into law in April this year, unlocking faster permitting and access to funding via the Connecting Europe Facility.

Enagás has also been appointed the provisional manager of the Spanish Hydrogen Backbone by the federal government at the end of last year. And in February, the company slashed shareholder dividends from €1.74 to €1 per share as it prepared to spend €4.9bn on building out H2 pipeline infrastructure across Spain.
Meanwhile, Catalina has secured subsidies via the European Hydrogen Bank’s pilot auction, which will pay out €0.48/kg of H2 — equivalent to €230m.

On the back of these changes, CIP applied to revise its estimates for investment into the Catalina project to more than €2.1bn this summer, which has now been approved by the Aragon government.

In addition to new compressors and pipelines to link up to the closest route of the Spanish Hydrogen Backbone, running through Ebro to Levante, this revision also includes an extension of the “urban transformation area”, ie, the space impacted by the project and its surrounding infrastructure, from 723,450 square metres to 772,913 square metres.

Hydrogen Insight has reached out to CIP and Enagás to confirm whether project costs have been redistributed between the two companies as a result of the change in plans for the pipeline.
The Catalina project is still expected to produce 84,000 tonnes of green hydrogen in its first phase, equivalent to around 15% of Spain’s current grey H2 consumption.

Development of a second phase to scale capacity up to 2GW, capable of producing 336,000 tonnes a year, could start in 2030, according to documents from the regional government of Aragon.

As such, the move away from a direct connection with a single offtaker towards feeding H2 into a national network could open up opportunities for a wider pool of offtakers.
(Copyright)
Published 28 August 2024, 12:52Updated 28 August 2024, 14:30
Copenhagen Infrastructure PartnersSpainEuropeGreen H2Ammonia