Power-to-X

The term Power-to-X (PtX) covers a number of technologies, which produce hydrogen by use of electricity. The term Power-to-X is mainly used in Denmark, while green hydrogen or electro fuels (‘e-fuels’) are more common terms abroad. Both terms describe the process of converting electricity and water into hydrogen through electrolysis. The hydrogen can subsequently be used directly as fuel for road transport or industrial purposes, or it can be further converted into other fuels, chemicals and materials.

Hydrogen can be converted into ammonia by use of nitrogen from the atmosphere, or into methanol or jet fuel by use of CO2. This CO2 can be provided from biogas plants or be collected from cogeneration plants, incinerators or the industry. It can then be used for PtX (Carbon Capture and Utilization (CCU)), or be deposited underground (Carbon Capture and Storage (CCS)).

The Danish Energy Agency has assessed that PtX is an essential part of achieving the Government’s 70% reduction goal by 2030, and in particular in relation to the climate neutrality goal for 2050. PtX fuels can be used to promote the green transition of the transport sector, especially within aviation, shipping, heavy transport, agriculture, the industry etc.

In Denmark, several companies are ready with technology and expertise across the entire PtX value chain. Furthermore, Denmark has large resources within renewable energy. Green hydrogen and PtX are of increasing interest throughout Europe, and large markets are expected to emerge towards 2030 and 2050. Denmark therefore has large business and export potentials within PtX.

It’s now possible to submit an offer through the marked based competitive bidding process, to support production of green hydrogen in Denmark.

Deadline for submission: September 1, 2023, 12:00 noon.

All competitive bidding material, including questions and answers, can be found on the competitive bidding portal. Further questions regarding the bidding process and related material, can be submitted through the competitive bidding portal before Friday August 18, 2023.

Background

Following a political agreement, 1.25 billion DKK will be implemented as a market-based competitive bidding process for PtX. The agreement outlines the framework for the implementation of the scheme and states that it must contain:

• Market-based competitive bidding process, aiming for the cheapest and largest hydrogen production within the budget.
• Winners of the competitive bidding process are determined by choosing the lowest offered bid price until the budget is exhausted.
• The aid is provided as operational support and is paid per amount of green hydrogen produced.
• Only hydrogen which is produced from renewable energy sources and meets EU documentation requirements for green PtX fuels is eligible for aid.
• The aid model is based on a fixed price premium.
• The aid is provided for a 10-year period and all the funds (DKK 1.25 billion) are disbursed in one single competitive bidding round, provided that sufficiently attractive bids are received, cf. below.
• A safety mechanism is introduced to ensure that the competitive bidding process does not result in very modest hydrogen production and capacity due to high bid prices. In addition to a general bid ceiling meant to create security against very high bid prices, a lower, budget-controlling bid ceiling will be set, which is a prerequisite for allocation of the entire budget, provided that sufficiently attractive bids are received. Alternatively, two bidding rounds are held. The bid ceilings will be determined by the Danish Energy Agency.

See the conditions of the competitive bidding process for PtX

On 14th September 2022, a stakeholder meeting was held by the Danish Energy Agency, where the framework for the competitive bidding process and the preliminary conditions were presented.

For questions about the competitive bidding process, please contact project manager Stine Sandermann Justesen, ssmj@ens.dk

Following a political agreement, the establishment of a PtX taskforce was agreed upon. The taskforce has two main purposes:

• Contribute to the coordination between state and municipal authorities working with PtX, with a particular focus on approval and permit procedures. For this purpose, a work group for authority assistance is to be established.
• Ensure continuous dialogue across the PtX sector with the purpose of following the development, as well as identifying and addressing barriers for achieving the goal of 4-6 GW electrolysis capacity by 2030. For this purpose, a PtX stakeholder forum is to be established.

The PtX taskforce is led by a steering group within the Danish Ministry of Climate, Energy and Utilities, and it is serviced by a secretariat within the Danish Energy Agency. Each year, the taskforce reports back to the political parties behind the PtX agreement.

Work group for authority assistance
The work group for authority assistance consists of employees from public authorities involved in approvals and permits within the PtX area. The purpose of the work group is to promote quality and efficiency in case management as well as identify possible synergies or potentials for streamlining between processes. Furthermore, the work group acts as reference group for the Danish Energy Agency’s work to guide PtX stakeholders about approval and permit procedures etc.

PtX stakeholder forum
The stakeholder forum consists of employees from a number of public and private stakeholders with knowledge on regulatory barriers and possibilities, as well as knowledge on new development within PtX. The purpose of the forum is to gain a broad understanding of possible barriers for achieving the goal of 4-6 GW electrolysis capacity by 2030. 

For any enquiries, contact the Power-to-X secretariat: ptx@ens.dk