EPC and Supply Chain Strategies in Power-to-X: Navigating Technology, Procurement, and Risk

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The Rise of P2X and the Complexity Behind the Curtain

Power-to-X (P2X) projects are moving rapidly from visionary concept to large-scale industrial implementation. As countries push to decarbonize heavy industry, transport and energy storage, the potential of hydrogen-based fuels and chemicals, such as green hydrogen, ammonia, and methanol, is increasingly evident. But ambition alone doesn’t build projects. Delivering these assets at scale demands deep integration of renewable energy, chemical processing, and complex infrastructure, each with its own risks, technologies, timelines, and partners.

Unlike conventional infrastructure projects, P2X requires coordination across interdependent systems. From technology selection and engineering design to procurement, construction, and long-term operations, every decision has downstream consequences. Project success depends not only on having the right technologies but on assembling the right supply chain, structuring delivery through effective EPC contracts, and aligning the whole system with a bankable risk profile.

This article explores how to approach EPC and supply chain strategies in P2X, including the implications of technology choice, delivery model, partner selection, warranty structure, procurement strategy, and financing alignment.

Technology Selection: Beyond Performance, Toward Integration

After deciding, the purpose, overall structure, and size of the project, technology selection is one of the earliest and most defining decisions in a P2X project. It typically begins with the electrolyzer and expands downstream to include synthesis units, compression, storage, and transport. However, these decisions can’t be made in isolation. Integration, maturity, vendor experience, and delivery partner familiarity must all be considered alongside expected performance and cost metrics.

Electrolyzer technology, whether alkaline, PEM, or solid oxide—must be aligned with the project’s power supply profile, load flexibility needs, ramping capability, and operating strategy. Similarly, the chosen synthesis process, such as Haber-Bosch for ammonia or methanol loops, must match hydrogen flow characteristics, power variability, and the desired output scale.

Maturity of the technology plays a critical role.Lenders and insurers typically require commercial-scale operating references before providing coverage. Yet even when the technology itself is proven, integration with the rest of the process may not be. It is essential to ensure that the EPC contractor or industrial gas partner has hands-on experience with the specific technologies being selected. A technically attractive solution on paper becomes a risk liability in practice if no one on the delivery team has worked with it before.

Technology choices should also factor in long-term operability and O&M considerations. Process complexity, vendor support, modularity, and availability of spare parts all influence lifetime cost and plant availability. As a rule, it's safer to prioritize integration fit and operational readiness over marginal efficiency gains, especially in first-of-a-kind projects. Over time as a developer develops additional projects with a similar design and partners, clear cost-out structures can be implemented for the plant.

Selecting Partners: Technical Strength and Strategic Alignment

Choosing the right partners is as critical as selecting the right technologies. P2X projects typically require collaboration between RES developers, electrolyzer and synthesis OEMs, EPC contractors, and potentially port or export infrastructure partners. Each partner must bring not only capability, but also the right alignment in terms of commercial model, risk appetite, and project ambition.

Technical and delivery track record should be a baseline requirement. Partners should have completed similar projects, or, at a minimum, demonstrate deep knowledge of the technologies and market conditions relevant to your project. In addition to capabilities, partner selection should consider prior experience with your chosen technologies, ability to engage across interfaces, and readiness to offer performance guarantees.

One often overlooked selection criterion is whether a potential partner is willing to invest equity in the project. This is especially relevant in integrated consortia, where off takers, industrial partners, or EPC contractors may align long-term interests by taking a stake.Equity participation can signal confidence, support early-stage development, and improve financing readiness for project financing.

Cultural fit also matters. Successful project execution depends on transparent communication, shared problem-solving, and mutual accountability. A technically strong partner that lacks flexibility or communication skills may slow delivery and cause friction during negotiation, construction, or operation.

EPC Strategy: Turnkey vs. Multi-Package Models

Contracting models vary widely across P2X projects.Some developers choose a full turnkey EPC approach, where a single contractor is responsible for the entire delivery, from RES integration to chemical production and utilities. This model reduces coordination complexity, places interface risk with the EPC, and often comes with unified performance guarantees. It is especially attractive for projects prioritizing simplicity or bankability, such as those relying on public-private funding or tight commercial timelines.

However, turnkey delivery comes with trade-offs. It limits flexibility in supplier selection, can lead to higher EPC margins due to bundled risk, and may restrict innovation by favouring technology combinations already integrated by the contractor. Additionally, the ability to divest all or part of the renewable developments becomes complex in such a structure, reducing flexibility of the project. Furthermore, only a few EPCs can deliver the entire P2X chain under one contract, reducing competition.

An alternative approach is to split the project into work packages—typically RES, electrolysis, chemical synthesis, and storage, each delivered by a specialist contractor or OEM. This model allows developers to select best-in-class technology providers, optimize cost, and maintain control over key interfaces. It also enables phasing or modular scaling. But with thisflexibility comes complexity. The integration burden shifts to the developer or a third-party owner’sengineer, and risks multiply across technical and contractual interfaces.

A hybrid approach, now common in the market, involves separating the RES project into a separate entity or PPA structure, with the chemical plant delivered through a consolidated EPC. This allows RES to be developed under utility or PPA terms, while centralizing risk and guarantees within the core chemical infrastructure.

Whichever strategy is chosen, the key is to define responsibilities, interfaces, and performance expectations clearly and early.P2X projects rely on continuous process flow; a failure in integration can undermine the entire system.

Figure 1: Example of different EPC packages and wrapping for a P2X project

Wrapping and Warranty Strategy: Risk Allocation in Practice

In any infrastructure project, warranties and guarantees play a vital role in de-risking delivery and unlocking finance. InP2X, they become even more important due to the tight coupling of process systems and the presence of relatively new technologies.

In a full turnkey model, the EPC contractor often wraps the entire system, providing performance guarantees and delay damages under a single contract. This allows developers and lenders to deal with one counterparty and one set of risk metrics. However, few EPCs are willing to assume full process risk for unfamiliar technology combinations unless supported by extensive warranties from OEMs, backed by parent company guarantees.

In split-package models, warranties tend to be fragmented. Electrolyzer vendors may offer output guarantees but notintegration guarantees. Synthesis OEMs may offer reactor performance metrics but not interface guarantees with feedstock inputs. In this structure, the owner must coordinate and harmonise warranties, often with support from legal and technical advisors.

To improve bankability, some developers require EPCs to pass through OEM warranties in full, and negotiate “back-to-back” coverage for delay, underperformance, and defects. In more complex cases, a third-party owner’s engineer or integrator may be appointed to validate system integration, test plans, and warranty alignment. Regardless of structure, warranty strategy must be addressed early, during pre-FEED or basic design. Misalignment between warranty scopes can create major blind spots in performance risk.

Figure 2: Rating of P2X deliver models. Rating from 0 (low) to 5 (high)

Open Book Procurement: Trust, Transparency and Trade-Offs

The open book model is gaining traction in early-stageP2X projects as developers seek to de-risk supply chain exposure while maintaining cost control. Under this approach, the EPC or contractor collaborates with the owner to procure major components and services with full cost transparency. Vendor quotes, markups, margins, and contingencies are disclosed and negotiated together.

This model fosters trust and enables earlier procurement of long-lead items, especially when funding is staged or construction timelines are tight. It also allows developers to participate in vendor selection and align ESG, compliance, and technical standards across packages.

However, the model is not without trade-offs. Open book procurement demands high levels of coordination and robust cost-tracking systems. It can blur accountability if roles are not well defined and may reduce competitive pressure if not implemented with clear commercial incentives. In practice, open book works best when paired with target cost models, pain/gain share arrangements, or milestone-linked incentives that keep both parties aligned on performance and budget.

Open book is not suitable for every partnership. SomeEPCs are reluctant to expose pricing structures or share procurement responsibilities. Others see it as a way to reduce risk and increase collaboration. The key is ensuring mutual expectations and controls are agreed up front.

Integration of O&M - Start at pre-FEED, Not After COD

In the renewable energy sector, O&M planning is often deferred until after Financial Investment Decision (FID). But in P2X, especially within the chemical plant, this mindset does not work. Chemical synthesis infrastructure is more complex, more sensitive, and more demanding in terms of continuous operation, process safety, and system control. Operational readiness must be built into the design from the outset.

Design decisions on layout, redundancy, access, instrumentation, and utilities all impact operability and maintenance. To avoid these pitfalls, O&M should be integrated at the pre-FEED stage. Future operators or O&M partners should be involved in design reviews, control philosophy discussions, and spare parts planning. This ensures that what gets built is not only efficient, but operable and maintainable over the long term.

For developers planning to operate the asset themselves, this reduces lifecycle cost and unplanned downtime. For those planning to sell post-COD, it improves exit value and reduces buyer due diligence concerns.

Supply Chain Complexity and Risk Mitigation

The P2X supply chain spans multiple sectors, regions, and vendors. Lead times for critical equipment, such as electrolyzers, compressors, and power transformers, can stretch 18–24 months. Logistics routes may be constrained, especially for remote or coastal sites. Local content rules and ESG compliance add further layers of complexity.

To manage these risks, developers must adopt a structured, proactive procurement strategy. This includes early engagement with long-lead vendors, pre qualification of suppliers based on technical and ESG criteria, dual sourcing of critical components, and alignment of QA/QC procedures across EPCs and OEMs.

In some cases, developers procure key items directly as owner-supplied equipment (OSE) to avoid delays. This strategy offers more control but requires coordination with EPCs on installation, commissioning, and warranty integration.

Understanding global manufacturing dynamics, port access, and customs procedures is just as important as technical design. Supply chain risk is not static, it must be mapped, monitored, and mitigated across the full project timeline.

Project Finance Realities

For projects relying on non-recourse or limited-recourse finance, risk allocation is not just a technical issue, it isa financing issue. Lenders require clearly defined scopes, contractual milestones, liquidated damages, and performance guarantees. The more interface risk that remains with the developer, the harder it becomes to reach financial close.

In turnkey models, risk is consolidated and generally easier to finance, provided the EPC is bankable. In multi-package models, developers must work harder to show that performance will be delivered, risks are mitigated, and interfaces are robustly managed.

This often involves appointing a dedicated process integrator, allocating contingency reserves, and negotiating back-to-back warranty coverage. Documentation must include detailed interface matrices, completion tests, and creditworthy counterparties. Where new technology is used, additional coverage such as extended warranty, performance insurance, or parent company guarantees may be required.

Ultimately, the project must demonstrate not that risks do not exist, but that they are known, assigned, and managed by competent parties.

How Poly Consulting Supports P2X Delivery

At Poly Consulting, we help developers, investors, utilities and industrial partners structure and deliver successful Power-to-X projects. From early strategy to final execution, we guide our clients through:

EPC model selection and contract strategy
Technology and vendor evaluation
Warranty and wrapping structuring
Open book procurement design
Process integration oversight
Supply chain mapping and long-lead procurement
O&M planning and integration
Lender alignment and bankability advisory

With deep experience across renewable energy and green hydrogen value chains, we help translate complexity into clarity, and vision into investable action.

Elisabeth Hasselström

Head of Power, Utilities and Renewables

Elisabeth brings over a decade of expertise in the renewable energy sector, specializing in corporate strategy and in-house project development. Her journey began as an M&A advisor in banking for renewable companies, where she honed her insights before transitioning into consulting roles directly focused on Wind, Solar, Energy Storage (BESS), and Power-to-X projects.
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Additionally, she is connected to an extensive network of highly skilled professionals within the Energy sector, enhancing her ability to support and drive impactful partnerships and projects.

Connect with Elisabeth

EPC and Supply Chain Strategies in Power-to-X: Navigating Technology, Procurement, and Risk

EPC and Supply Chain Strategies in Power-to-X: Navigating Technology, Procurement, and Risk

Scaling Services

The Rise of P2X and the Complexity Behind the Curtain

Technology Selection: Beyond Performance, Toward Integration

Selecting Partners: Technical Strength and Strategic Alignment

EPC Strategy: Turnkey vs. Multi-Package Models

Wrapping and Warranty Strategy: Risk Allocation in Practice

Open Book Procurement: Trust, Transparency and Trade-Offs

Integration of O&M - Start at pre-FEED, Not After COD

Supply Chain Complexity and Risk Mitigation

Project Finance Realities

How Poly Consulting Supports P2X Delivery

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