Avangrid partners with Sempra for green hydrogen projects in the United States

Green hydrogen installation of Avangrid, a subsidiary of Iberdrola, in an image provided by the company.

Iberdrola seeks to continue growing in renewable energies in the United States.

In addition to its investment projects in networks, wind, marine and onshore and solar energy, its listed subsidiary Avangrid announced this Wednesday an alliance with the Sempra group for the possible joint development of green hydrogen and ammonia projects in the United States, powered by renewable sources.

The agreement provides a framework for the companies to identify, evaluate and potentially develop large-scale green hydrogen projects to help meet the energy and decarbonization needs of U.S. and international customers, the companies said in a joint statement.

This is an agreement in principle that is not binding.

The companies caution that the development of these joint projects is subject to a number of risks and uncertainties, including reaching definitive agreements, obtaining all necessary permits and making a final investment decision with respect to each project.

“Clean hydrogen and ammonia can be effective decarbonization solutions for various sectors of the US and global markets.

We are very pleased to be working together with Avangrid to develop large-scale green ammonia and hydrogen projects to further the role of hydrogen in the global energy transition,” Justin Bird, CEO of Sempra Infrastructure, the group’s subsidiary, said in a statement. Always sign the agreement.

"Significant infrastructure will be needed to realize the potential of hydrogen and Sempra Infrastructure's combined platform is well positioned to support the deployment of these new energy solutions," he added.

Sempra is a large group listed on the New York Stock Exchange and is valued at around $45 billion.

Its subsidiary Sempra Infrastructure is developing multiple energy transition projects in North America, including liquefied natural gas (LNG) export projects to serve customers in the Atlantic and Pacific basins, as well as new opportunities in the field of renewable energies, carbon capture and sequestration, as well as other ways to produce clean hydrogen and ammonia by taking advantage of the resources available in different regions.

Avangrid is the third largest renewable energy operator in the United States, according to the company.

The company based in Orange (Connecticut) has an ambitious growth plan in networks and renewable energies at a time when the United States has opted to encourage its deployment.

It plans to invest some 14,600 million dollars until 2025, as it recently announced on its investor day.

Those investment plans include the purchase of PNM Resources, the New Mexico company whose acquisition is currently blocked by the regulator.

Without it, investments through 2025 would amount to about $8.1 billion.

The investment figure also includes the power transmission line from Canada that has had some obstacles and in which the group has recently achieved a legal victory.

In a recent interview with EL PAÍS, its CEO, Pedro Azagra, pointed out that "the energy transition in the United States has no turning back".

In the presentation to analysts that he made on the day of the investor, Azagra pointed out the possibility of selling assets amounting to some 2,000 million dollars.

“It's the same thing we've done in the group.

I have been in the group for 20 years with purchases and sales, we want to do so many things that we do not always have the financial capacity for everything that we have on the table.

In the end, the fact that we look for partners to participate in 50% of some projects is what we have done all our lives, ”he later declared to this newspaper.

Recently, Iberdrola has announced an agreement with Energy Infrastructure Partners (EIP) for the sale of 49% of the Wikinger offshore wind farm, in German waters of the Baltic Sea, for 700 million euros.

In the United States, it has a 50% stake with Copenhagen Infrastructure Partners (CIP) in the 800-megawatt (MW) Vineyard Wind 1 offshore wind farm.

In the case of the alliance with Sempra, what they are considering are projects undertaken jointly from the beginning.

Iberdrola already has significant investments in green hydrogen in Spain.

Last May, its president, Ignacio Sánchez Galán, announced at the World Economic Forum in Davos (Switzerland) that Iberdrola will invest 3,000 million euros in green hydrogen to accelerate the European Green Deal.

Green hydrogen is, according to the company, the great European challenge and an opportunity, and that a stable European framework must be designed to promote investments in this technology.

Huge amounts of wind and photovoltaic power are needed to generate green hydrogen.

Sánchez Galán emphasized those energy uses that are difficult to electrify, an area in which green hydrogen is called to play a fundamental role, such as in many industrial processes.

Iberdrola inaugurated in Puertollano (Ciudad Real) in May the largest green hydrogen plant for industrial use in Europe, which will produce 3,000 tons per year.

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