The Danish Energy Agency (DEA) has launched a tender for the construction and operation of Power-to-X projects, with an application deadline of 1 September. Through this tender, the first of its kind in Denmark and in the world, the country has made available DKK 1.25 billion (about EUR 167.7 million) in state aid for the production of Power-to-X in the form of green hydrogen.

According to the Danish government, a safety mechanism will be introduced to ensure that the tender does not result in very modest hydrogen production and capacity due to high bid prices.

In addition to an overall bid cap, which should create security against very high bid prices, a lower bid cap will be set to control the budget, which is the prerequisite for the entire budget to be allocated, if enough attractive bids are received. Alternatively, two bidding rounds are held. The bid ceilings will be determined by the DEA.

Bidders must specify a Bid Price in their bid for the total water electrolysis capacity they will establish and the total amount of green hydrogen they intend to produce during the 10-year aid period, as well as the number of hours at full load.

Also, bidders can submit a single bid, comprising several water electrolysis plants located at different locations, or several separate bids, i.e. one bid for each water electrolysis plant. A bid must contain at least one water electrolysis plant and the same plant cannot be the subject of several different bids.

The tender applies to new water electrolysis plants where work on the project has not started with existing plants eligible only in the case of an extension through adding new water electrolysis capacity to the plant and installing a separate meter for hydrogen production supported under this tender.

The tender supports the agreement signed by the Danish government in March that commits the country to achieving 4-6 GW of electrolysis capacity by 2030.