Danish Energy Agency makes new decision on PtX tender winners as one company fails to meet contractual obligations

The Danish Energy Agency (DEA) has made a new decision regarding the winners of Denmark’s first Power-to-X (PtX) tender as it turned out that one of the winners, namely Plug Power Idomlund Denmark, can not meet the condition of providing a bank guarantee, meaning the company is no longer the winner of the tender. At the same time, HyproDenmark/Everfuel has been offered an increased amount.

On October 27, 2023, the Danish agency revealed the six winning projects of the PtX tender divided among four companies, which included Plug Power Idomlund Denmark.

In the meantime, it has turned out that this company can not meet the contractual obligation related to the provision of a bank guarantee. Based on this, the Danish Energy Agency had to disregard Plug Power’s offer and make a new decision, the agency said in a statement issued on November 20.

Pursuant to the new decision, Plug Power is no longer among the winners of the PtX tender. European Energy (Windtestcenter Måde K/S), European Energy (Padborg PtX ApS), Electrochaea (Biocat Roslev), and European Energy (Kassø PtX Expansion ApS) remain the winners of the tender and are still awarded their entire offer.

The agency noted that the marginal bidder HyproDenmark/Everfuel still can not be offered the full offer, but will be offered the remaining amount of the total budget. The increased offer has a value of DKK 211 million (€28,3 million).

Commenting on the decision, Jacob Krogsgaard, Founder and CEO of Everfuel, said: “The PtX tender is a confirmation of the Danish government’s commitment to developing the national hydrogen production and export potential. The Everfuel Hy24 JV is well positioned to pursue this opportunity as part of our joint strategy of making green hydrogen commercially available in key European markets.”

The Danish Energy Agency noted it does not consider that the new decision will have an impact on when contracts are entered into with the winners. It is also not expected to have an impact on the time horizon for when the plants will be ready.

Following the new decision, there will be five winning projects which will now together build over 180 MW of electrolysis capacity instead of the initially announced 280 MW through six projects.

As for the next step, a new ten-day standstill period starts, after which the Danish Energy Agency and the winning projects enter into contracts on the condition that no complaints are received during the period.

To remind, the tender was launched in April and was open until September 1, 2023. Through the tender, Denmark made available DKK 1.25 billion (approximately €167.7 million) in state support for the production of Power-to-X in the form of green hydrogen.

The tender was held to procure hydrogen produced by using renewable energy sources and is part of Denmark’s goal to reach between 4 and 6 GW of electrolysis capacity by 2030 and its PtX strategy, released in 2021, according to which the country’s offshore wind resources provide good conditions for the production of green hydrogen, which requires large amounts of green electricity.