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Udvikling og fremme af brint og grønne brændstoffer (Power-to-X strategi)
The Danish hydrogen strategy takes the form of a political agreement between eight out of the 16 parties represented in the Danish parliament at the time of adoption. The agreement is based on the proposal published in December 2021 but with broader parliamentary support. The strategy puts focus on using PtX for difficult-to-abate sectors such as shipping, aviation, agriculture, parts of industry and parts of heavy-road transport.
PRODUCTION
For production of hydrogen and derivatives the agreement puts forward a target of 4 to 6 GW of electrolysis capacity by 2030. A key emphasis point is that hydrogen must be of renewable electricity origin following EU methodology.
The flagship initiative of the agreement is the PtX tender through which the Danish energy Agency will establish a tender to support green hydrogen production with a funding of DKK 1.25 bln. (approx. EUR 167 mln). Rules for the tender agreed in the strategy include:
- Market-based tender, aiming for the cheapest and largest hydrogen production for the budget;
- Winners of the tender are based on the lowest bids until the budget is exhausted;
- The subsidy is granted as OPEX and paid per amount of green hydrogen produced;
- Only for hydrogen production from renewable energy sources according to EU methodology;
- Support is granted for a 10-year period and all the funds are to be distributed in a single tender, if sufficiently attractive bids are received;
- A safeguard mechanism is in place to ensure that the tender does not result in very low hydrogen production due to high bid prices. A general bid ceiling will create security against very high bid prices and a lower, budget-driven bid ceiling will be set. If not enough sufficient bids are attracted, two bidding rounds will be held. The tender ceilings will be determined by the Danish Energy Agency.
More broadly, the agreement foresees changes in the legislation applicable to direct lines, differentiated consumption tariffs and local collective tariffing to promote cost-effective use of the energy system.
TRANSMISSION AND DISTRIBUTION
In relation to transmission and distribution, the government will initiate dialogue with Germany and other neighbouring countries on the development of hydrogen infrastructure, as well as present an energy and supply package with a proposal on how to regulate hydrogen infrastructure in connection to ownership, financing, operation, as well as other issues.
