The state's DKK 28.7 billion tender for carbon capture and storage (CCS) surprisingly closed on Wednesday with two bidders. For a long time it looked as if only one out of the ten prequalified players would bid. But even though it ended with two bidders, according to Dansk Fjernvarme, which represents nine out of the 10 prequalified companies, there is a need to adjust the framework for future CCS tenders.
The bids come from Aalborg Portland and an as-yet-unnamed player in the district heating sector. Towards the end of the deadline, there has been a prospect of only one bid for extended periods, which, according to the industry organization, points to structural challenges in the tender's conditions.
- All the companies that have been part of the tender have good projects that are ready to be taken forward when the market and the framework allow. Therefore, the authorities, in collaboration with the CCS players, should enter into a dialogue on the development of the CCS tender with a view to finding a new model that can better ensure that the potential for CCS in Denmark can be fulfilled, says Kim Mortensen, CEO of Dansk Fjernvarme.
According to the organization, uncertainty about, among other things, storing CO2 underground and the risk of financial sanctions have made it difficult for more players to bid. This has contributed to the fact that competition in the tender was limited.
Dansk Fjernvarme assesses that CCS is still necessary to achieve the climate goals, but that it requires that both tender models and the entire CCS value chain be adjusted if future pools are to attract more bidders and utilize the full CO2 reduction potential.
- With two bidders for the CCS tender, the pool is getting closer to being able to deliver as expected towards Denmark's 2030 target. But it is also necessary to consider that it is also important to develop the value chain for CCS in Denmark for the benefit of the climate in the future. The potential is great and there are many relevant places in the landscape to capture and store CO2. We will need to ensure broad development across sectors with a focus on the entire value chain, so that we do not see a similar development in a new CCS pool later, concludes Kim Mortensen.
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