01 Oct 2020, 13:25
Kerstine Appunn

Solar, storage hybrid projects win majority of Germany's new “innovation auctions”

Clean Energy Wire

The latest round of Germany's tenders for renewable installations has generated great interest in solar PV as well as combined solar and storage installations, while onshore wind energy tenders were undersubscribed yet again. The Federal Network Agency (BNetzA) for the first time included a so-called “innovation auction” for renewable projects with a capacity of 650 megawatts (MW). These can include combinations of "fluctuating" onshore wind and solar PV with "non-fluctuating" sources such as biomass and storage devices, which can help to stabilise the power system. The majority of winners (of a total 1,095 MW bid in this section) were combinations of solar PV and storage, which will receive between 1.94 and 5.52 eurocents per kilowatt-hour (ct/kWh) as a fixed premium on top of the wholesale market price. In the auctions, companies submit bids based on the amount of government support the projects will require.

Kerstin Andreae, chairwoman of energy industry association BDEW, said the results showed that innovation auctions were “a step in the right direction,” which could achieve even more by increasing the flexibility of renewable installations if relevant changes were made in the new Renewable Energy Act (EEG). “In the innovation tenders, projects for hydrogen production, local heat production from renewable electricity or other regional flexibilities could be supported.”

As has been the case in previous auctions, solar PV tenders (this time for 257 MW) were highly oversubscribed (163 bids with a total of 675 MW). The winning projects will receive between 4.8 and 5.39 ct/kWh. Unlike for the innovation projects, this remuneration is the maximum guaranteed payment from which the average wholesale price is deducted.

Onshore wind auctions were again undersubscribed. Twenty-five bids amounting to 310 MW did not make the set target of 367 MW. Winning bids will receive between 6.17 and 6.2 ct/kWh, which is around the current maximum support in wind auctions of 6.2 ct/kWh.

Industry association VDMA criticised that all five tenders for onshore wind energy had been undersubscribed this year. “How does this fit in with the ambitious climate targets in Germany and Europe and the increasing demand for electricity from renewable energies in industry?” VDMA managing director Matthias Zelinger asked. “A planned expansion of wind energy requires fast approval procedures and sufficient land.”

Herrmann Albers, president of wind industry association BWE, said that current obstacles to wind park approvals, such as the handling of nature and wildlife protection, would have to be resolved quickly. “The fact that the southern German states once again failed to win tenders shows that here too there is urgent need for action,” Albers said.  

Germany's government has set a target of 65 percent renewables in electricity consumption by 2030. Larger additions to existing wind, solar PV and biomass capacity are therefore planned in the next version of the Renewable Energy Act (EEG) which is due to be passed by parliament in autumn 2020. But the lack of interest and a back-log in onshore wind projects in particular worries many observers that not enough capacity will be added to meet the 2030 target.

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