Lightsource BP partners with Portugal's Dourogas on green hydrogen portfolio

Lightsource BP and gas utility Dourogas have partnered to develop renewable hydrogen projects in Portugal, powered by solar generation, the companies said Dec. 23.

The companies are exploring the potential of eight hydrogen sites, with Lightsource BP to supply 200 MW of solar generation to power 130 MW of electrolyzers, developed by Dourogas, and additional clean power supply from the grid to optimize operations.

The partnership is aiming for first production "well in advance of 2025," Lightsource BP told S&P Global Platts.

The hydrogen is to be injected directly into the Portuguese gas grid, the companies said.

"Solar is scalable, quick to deploy and today, cheaper than any other form of electricity," Lightsource BP Country Head for Portugal Miguel Lobo said in the companies' statement.

"We have always believed in solar as a vital tool in decarbonization. When used to generate green hydrogen, it becomes an entire energy transition toolkit," Lobo said. "The clean energy locked into these hydrogen molecules can immediately cut the footprint of industries, heavy transport and heat in ways electricity alone cannot."

"This partnership is a beacon of the possible. It shows what the energy sector can do not in 2050, or 2030, but right now," he said.

The first project in Monforte will receive a Eur5 million ($5.7 million) grant from the EU's Portugal 2020 fund to support the early-stage deployment.

"We expect to start with a smaller site at Monforte and scale upwards as our partnership with Dourogas matures," Lightsource BP told Platts.

Lightsource BP aims to develop 25 GW of solar power by 2025. It has an existing solar project pipeline of around 1.5 GW, in addition to the joint venture with Dourogas.

Dourogas is developing several "green gas" projects involving biomethane as well as hydrogen. The company supplies around 30,000 grid customers in Portugal, as well as providing gas for mobility.

Portugal's hydrogen strategy aims to deploy 2 GW of electrolyzers and a 15% blend in natural gas grids by 2030, supported by Eur900 million in public funding.

Blue hydrogen produced from fossil fuel sources coupled with carbon capture and storage is projected to be cheaper to produce than green hydrogen from electrolysis powered by renewables, but costs are expected to fall rapidly this decade.

Platts assessed the cost of producing renewable hydrogen via alkaline electrolysis in Europe at Eur23.50/kg ($26.50/kg) Dec. 21 (Netherlands, including capex), based on month-ahead power prices. PEM electrolysis production was assessed at Eur27.61/kg, while blue hydrogen production by steam methane reforming (including carbon, CCS and capex) was Eur11.05/kg.