Denmark has launched a DKK1.25bn ($184mn) tender to support the production of green hydrogen and its derivatives. Subsidies will take the form of operating aid paid per kilogram of hydrogen produced over a ten-year period.

The tender is expected to support 100–200MW of production capacity that should reduce emissions across industry, mobility and energy by 70,000t/yr. Bids are capped at DKK120/GJ, or around DKK33.3mn/MW.

To be eligible for support, projects must produce hydrogen in compliance with the EU’s requirements for renewables additionality, temporal and geographical correlation, and a 70pc reduction in lifecycle emissions.

The Danish government also requires that projects are already in discussion with environmental authorities and the national transmission system operator Energinet but have not yet begun construction. Winning bids will have four years to start production in order to receive payments.

DKK1.25bn – Tender budget

The deadline for bids is 1 September 2023.

Denmark aims to produce 4–6GW of green hydrogen capacity by 2030. The government last month signed a declaration of intent with Germany to develop an onshore hydrogen interconnector between the two countries by 2028.

Denmark has set a target for renewables to cover 100pc of electricity and 55pc of overall energy consumption by 2030.

The EU’s delegated acts defining renewable hydrogen allow for grid-derived hydrogen to qualify if the emissions intensity of the grid is below 18g CO₂e/MJ and a renewable power-purchase agreement has been signed for equivalent electricity consumed. Denmark’s two bidding zones are estimated to have an emissions intensity of c.50g CO₂e/MJ, although this is expected to fall as coal-fired power stations are phased out by 2030.

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Author: Polly Martin