Portuguese project developer Madoqua Renewables, Danish fund manager Copenhagen Infrastructure Partners (CIP) and Dutch firm Power2X announced plans on Thursday to invest 1 billion euros ($1.09 billion) in a green hydrogen plant in Portugal.
First production at the plant to be erected in the port city of Sines, 150 km (93 miles) south of Lisbon, and to be powered by wind and solar parks that will be built in parallel, is expected by 2025, they said in a statement.
So-called green hydrogen, produced using renewable electricity, is seen as a key power source that can reduce pollution from long-haul heavy transport, steel and chemical industries and power generation.
The companies said the plant would include a 500-megawatt electrolyzer to produce 50,000 tons of green hydrogen and 500,000 tons of green ammonia per year.
The partnership agreement will be formally sealed on Friday, with licensing expected to be completed by the end of next year.
The plant should reach full capacity by 2030.
“Portugal is structurally well positioned to play a leading role in Europe’s emerging energy transition space,” said Rogaciano Rebelo, chief executive of Madoqua Renewables, which leads the consortium.
The hydrogen produced is expected to be used by local industry, but also transported by a pipeline currently being developed, injected into the existing natural gas network or processed to create green ammonia for export from the port of Sines, the statement said.
Portugal’s largest utility EDP and oil and gas company Galp Energia are both planning to build green hydrogen plants in the same industrial hub of Sines.