On Friday, the Danish government announced how Denmark's future hydrogen infrastructure will be financed. This lays an important trail for Energinet's continued work to mature new Danish hydrogen infrastructure, including  the work to ensure that hydrogen market participants communicate their needs.

Energinet have recently held a market dialogue with 30 different players on the method to identify the need for infrastructure. With the political agreement in place, further dialogue will clarify the actual needs for the hydrogen market participants. The first stage, 'Step 1', will be a market survey without any financial obligations, but with an emphasis on examining the maturity of the projects requiring hydrogen infrastructure. A subsequent 'Step 2' becomes a binding offer of capacity contracts.

Step 1 is now being initiated in order to provide a better basis for the coming political decisions and to enable Energinet to decide how a possible hydrogen system should be designed. Specifically, Energinet will send out a questionnaire on the size, location and maturity of the projects (e.g. land acquisition and environmental assessment). If the feedback in Step 1 is not robust enough to fulfil the criteria in the political financial agreement, the possibility of dividing the hydrogen infrastructure into phases and/or geographically reducing the hydrogen infrastructure project will be assessed by the third quarter of 2024.

Energinet's technical studies will continue until the end of 2024, with the aim of qualifying an investment decision in the first quarter of 2025 that complies with the terms of the financing agreement.

"With the political agreement, the framework for financing Danish hydrogen infrastructure is now in place. Energinet's next step is to initiate a market survey to determine the market's need for a hydrogen infrastructure with a special focus on mature projects. It is now crucial that we have a close dialogue with the players about where, when, and how much hydrogen they actually want to transport, and whether it will be used in Denmark or exported," says Michael Linnemann, Head of Hydrogen Development at Energinet 

Simultaneously with the Danish work on hydrogen infrastructure, the same is happening in Germany.

A German "Kernnetz" (German hydrogen infrastructure) is expected to be finally adopted this summer, along with a financing model. Energinet is working closely together with Gasunie Deutschland, which expects to establish a hydrogen connection from the Danish-German border southwards as part of "Kernnetz". 

Cross-border hydrogen infrastructure is expected to account for a central part of Denmark's future energy system. Using electrolysis, large volumes of electricity from solar cells, onshore wind turbines and offshore wind turbines can be converted into green hydrogen, which can be used in Denmark in sectors that cannot run directly on electricity, such as shipping, and can be exported to Germany, where heavy industry in particular is demanding green hydrogen.