The Danish Energy Agency has opened a Power-to-X tender of DKK 1.25 billion
On 19 April 2023, the Danish Energy Agency opened the Power-to-X tender, which offers support for companies' production of green hydrogen in Denmark. The deadline for submitting offers is 1 September 2023 at 12:00 (DK time).
The Power-to-X tender is one of the initiatives included in the Danish government's Power-to-X strategy of 15 March 2022, the overall purpose of which is to promote Denmark's business and export potential in the Power-to-X industry.
The purpose of this Power-to-X tender is to support the industrialization and upscaling of Power-to-X production in the form of green hydrogen in Denmark.
Power-to-X is a technology where electricity is utilized to produce hydrogen and hydrogen-based fuels. In electrolysis, electricity is passed through water, splitting the water into oxygen (O₂) and hydrogen (H). Hydrogen can be used directly as a fuel for the transport sector, but can also be further converted into other fuels, chemicals and materials, including methanol, ammonia, jet fuel, among others, which can similarly be used in land, sea and air transportation.
The support under the tender is granted for a 10-year period from the start of production and in the form of a fixed price premium in Danish kroner per gigajoule (GJ) of green hydrogen produced in accordance with the price stated in the tender documents.
Contracts will be awarded to the bidders with the lowest bid price per GJ until all funds (DKK 1.25 billion) are used up. If several offers contain the same bid price, the offers will be ranked according to the amount of green hydrogen from highest to lowest.
The tender conditions are as follows:
- Support is only available for new water electrolysis plants where work on the project has not yet started.
- The hydrogen must be "green" and therefore produced from renewable energy sources to be eligible for support.
- A minimum reduction of 70% is required for the total hydrogen production.
- The tenderer is obliged to obtain all necessary permits, approvals, exemptions, etc. for the project.
- Within four years from the conclusion of the contract with the Danish Energy Agency, the tenderer must have established the full capacity and started production.
- In order to participate in the tender, the tenderer must be able to attach a statement from the environmental authority that either 1) the project is described at a sufficiently detailed level for the first public phase of the environmental assessment process to be initiated, or 2) the project is described at a sufficiently detailed level for the environmental authority to make a screening decision on whether the project is subject to an environmental assessment requirement ("maturity requirement").
All information about the tender, including answers to questions and any amendments to the tender documents, will be published on the tender portal.
If you want to know more about the Power-to-X tender, please contact Plesner's Energy and Infrastructure team.