First oversubscribed bioenergy auction in Germany follows increase in support rates
Clean Energy Wire
Germany has marked its first oversubscribed auction for bioenergy plants, in which bids for a capacity of 532 megawatts (MW) significantly exceeded the auctioned volume of 300 MW, the country’s Federal Network Agency (BNetzA) said. “Never before have there been more bids in a single auction,” BNetzA head Klaus Müller said, adding that most bids applied for continued support for existing bioenergy installations. The oversubscribed tender is a sign of the technology’s importance in the country’s energy transition and should motivate lawmakers to ensure improved support conditions in the Renewable Energy Act (EEG), bioenergy lobby group HBB Bioenergie said. Interest in the auction had spiked after the BNetzA increased the maximum support level by ten percent, HBB Bioenergie head Sandra Rostek said. Higher investment and operational costs had made an increase in support necessary to allow economically viable operation at a large scale, she argued. Rostek said an increase of 20 percent would be necessary to cover energy production costs for biomass installations, meaning a sustained interest in auctions at current support levels is unlikely. “For a high participation rate in the medium-run and to reach the government’s expansion targets, another increase of legal maximum support rates is necessary,” she said, adding auctioned volumes should be increased, rather than lowered as the current EEG regulations stipulate.
While the auction had been oversubscribed for biomass plants that produce electricity locally, no bids were submitted for biomethane plants that can replace natural gas in the grid during peak load times, the BNetzA said. Only 29 MW of the submitted 532 MW capacity were for new installations, the agency added. The maximum support had been increased to 19.83 cents per kilowatt hour. The BNetzA had added a quota of 50 percent for priority support of installations in southern Germany in order to increase the guaranteed capacity in the region, which has fallen behind the north of the country in renewable power expansion.