Penalty payments for unimplemented wind power projects could safeguard expansion

Successful bidders in Germany’s auction system for onshore wind power projects should be subject to penalty payments if they fail to implement their accepted projects in time, Hilke Wilts and Ruth Delzeit write in a policy brief by the Kiel Institute for the World Economy (IFW Kiel). They says fines could ensure renewables expansion in Germany is not obstructed by citizens’ energy projects, which some industry actors fear will not pursue their projects with the same rigour as conventional bidders. “The considerable bid-price decrease over the last bidding rounds makes it practically impossible to run wind farms profitably,” the authors say, arguing that penalty payments could counteract this trend.

Find the policy brief in German here.

See the CLEW factsheet High hopes and concerns over onshore wind power auctions for background.