German wind power industry says second offshore auction confirms downward cost trend

New zero-support bids and an average support level of 4.66 cents per kilowatt hour (kWh) in Germany’s second offshore wind power auction confirm an ongoing trend in cost reduction in the sector, the German Wind Energy Association (BWE) said in a press release together with other wind industry organisations.  The jump of the average support compared to the 0.44 cent/kWh in the first auction was caused by a quota for turbine in the Baltic Sea. Up to half of the auctioned capacity of 1,610 megawatt (MW) is supposed to be installed in the Baltic Sea, which led to “less competition”, the BWE said. Conditions in the Baltic are “more complex” and the projects are scheduled for completion by 2022, which had pushed costs further, the wind power lobby group said. The government should now put the remaining grid connection capacity of about 800 MW up for auction quickly to ensure a swift further expansion.
The German Engineering Federation (VDMA) said the second auction has been “a success” and demonstrates that “the market is working”. “The average support of offshore wind power now is similar to that of other power sources,” VDMA head Matthias Zelinger said in the release. The federation explained that projects in the second auction are scheduled for completion before those winning in the first auction, which is why bidders could not bank on the same level of technologic progress when determining the price in the auction. 

Find the press release in German here.

See the CLEW factsheet on German offshore wind power for background.