Redesigned offshore auction signals “critical stage” for Germany’s wind power industry

The launch of the latest offshore wind power auction could signal a “critical stage” for the technology’s role in Germany’s energy transition, the offshore wind industry has said. The Federal Network Agency (BNetzA) auctioned 1.8 gigawatt (GW) at four pre-assessed locations in the North Sea, which means turbines built there could start feeding in electricity as early as 2028. With the latest auction, Germany “has edged closer to implementing the ambitious expansion goals for offshore wind,” said Karina Würtz, head of the Offshore Wind Energy Foundation. The BNetzA has changed several rules in the auctioning process, including the pre-assessment of the projects’ environmental impact, construction conditions as well as ocean currents and wind patterns, which greatly reduces project planning costs for successful bidders. The changed auction design also includes qualitative criteria that reward bidders who use a high share of renewables in turbine construction, apply sustainable production procedures and are ready to enter long-term delivery contracts. Instead of bidding for the lowest amount of support, potential offshore wind operators now have to pay a fee to get access to the profitable and fast-growing offshore market. The proceeds will be used to lower power prices and fund conservation and sustainable fishery projects. Bidders can submit their applications until 1 August 2023. Already in January, the BNetzA auctioned another 7 GW at unassessed locations.

“After years of stagnation, this is good news,” lobby group leader Würtz said. The critical stage for offshore wind has now begun, she said, adding that the upcoming bidding process would show how well companies manage to work with the new auction design. “We will now see how robust, attractive and forward-looking the auction design, the centrepiece of the Offshore Wind Energy Act, is going to be,” Würtz commented. Industry representatives had criticised the heavy reliance on reducing costs and omitting qualitative criteria, like transport emissions for turbine components produced outside of Europe. “This could have effectively strengthened Europe as a production location,” she added.

With a rather low offshore wind power capacity expansion of 342 megawatts (MW) in 2022, Germany must quickly gear up to bring the buildout in line with its ambitious renewable power targets. Across Europe, 150 GW capacity is to be installed by 2030, which will require a fast and comprehensive buildout of industry capacities across the region.