Renewables

Winners of offshore wind auctions in Germany chosen by lottery

Winners offshore wind auctions Germany lottery

David Will from Pixabay

Published

September 15, 2021

Country

Comments

0

Share

Published:

September 15, 2021

Country:

Comments:

0

Share

Several contestants asked for zero government support in their bids for three offshore wind farm locations, so the German regulatory body was forced to choose the winners by drawing lots. RWE Renewables and EDF were the luckiest. WindEurope CEO Giles Dickson suggests the approach needs to change.

Are offshore wind power projects on track to become profitable without subsidies? In its latest round of auctions, Germany awarded the rights to install a combined 958 MW in three locations without government support – except for a free grid connection, which will be paid by consumers through network charges.

Furthermore, several participants asked for zero incentives in their bids for each lot. In line with the propositions for the so-called central model for auctions, the Federal Network Agency (Bundesnetzagentur) chose the winner by drawing lots. RWE Renewables got two zones and EDF was awarded the remaining one.

Investors need long-term visibility

According to Chief Executive Officer of WindEurope Giles Dickson, that’s not a functioning market, because there isn’t any kind of equilibrium between supply and demand.

WindEurope’s Dickson: The auctions were crowded due to a three-year break

“There was huge interest from wind farm developers. They were desperate to get the market share, just to get the permits to build, rather than to minimize their financing costs. It was the first offshore wind auction in three years and it’s not entirely clear when the next ones are going to be taking place. You have to have long-term visibility. Then the supply side is going to be much more confident about how it behaves in these auctions,” he told Balkan Green Energy News.

Early developers have entry right for two out of three projects

It was the first time that Germany used the central model for offshore wind auctions. Some zero support bids were registered in the previous two rounds as well.

The latest auctions were made more complicated by the fact that the original developers of two of the projects have the right to step in on behalf of their costs in the early stages of planning. Namely, the rules have changed with the introduction of the auction system in 2017, so now they can opt to participate in the projects by November 2, but only under the same conditions.

Zero support bids were registered in all three round of auctions that were held so far

“We still don’t have final certainty and clarity on who is going to develop these sites, despite having waited three years for an auction,” Dickson said. “We’ve been saying for many years to the German government: you have to introduce contracts for difference. CfDs are the auction system for offshore wind in the United Kingdom, France, Poland and Denmark, and they will be in Greece in Lithuania. Only Germany and the Netherlands operate a different system, which allows for zero bidding. It means higher financing costs and higher costs for society.”

All projects must come online by 2026

RWE Renewables won the N-3.7 zone in the North Sea, located near the island of Borkum. The envisaged capacity is 225 MW.

The same company was the luckiest in the lottery for 300 MW in O-1.3 in the Baltic Sea, 40 kilometers from Rügen island. Iberdrola’s Windanker has entry rights for the location.

EDF from France won N-3.8 in the North Sea, also near Borkum. The planned capacity is 433 MW. Northland Power and RWE Renewables have the preemption rights there and they can exercise them via their joint venture Nordsee Two, which was the early investor.

The winning bidders are obligated to complete the facilities by 2026. They have the right to run them for 25 years.

Comments (0)

Be the first one to comment on this article.

Enter Your Comment
Please wait... Please fill in the required fields. There seems to be an error, please refresh the page and try again. Your comment has been sent.

Related Articles

iea electricity report 2022 prices

IEA: Rising demand for electricity could result in high prices over next three years

14 January 2022 - Average wholesale electricity prices in Europe in the fourth quarter of 2021 were more than four times as high as their 2015-2020 average

Western Balkans integrate markets easier energy transition funding

Western Balkans need to integrate markets for easier energy transition, funding

14 January 2022 - A joint approach makes funding green energy and the coal phaseout easier for the Western Balkans, but funding sources are still insufficient

field of wind turbines in sunset in spring

State-owned power utilities EPS, EMS ask for modification of law on renewables

11 January 2022 - Elektroprivreda Srbije and Elektromreža Srbije have asked the ministry to halt the adoption of bylaws for the renewables' subsidies

Emergy Siemens Gamesa wind Romania

Emergy acquires Siemens Gamesa’s wind energy portfolio in Romania

10 January 2022 - Emergy took over Romanian subsidiaries of Siemens Gamesa that are developing wind park projects in Dobruja totaling almost 370 MW