Three successful bids with zero support revive flagging German offshore wind expansion
Clean Energy Wire
The latest round of offshore wind power auctions in Germany has led to three bids claiming zero support for their operations wining the tender, the Federal Grid Agency (BNetzA) has said. The agency auctioned three projects with a combined capacity of just under 1 gigawatt at three different locations in the North Sea and Baltic Sea and bidders RWE and EDF secured all three projects with a guaranteed support bid of 0 cents per kilowatt hour (kWh). As the agency received multiple zero support bids for two of the projects, it decided which bidder will get awarded by drawing lots. The projects are scheduled to start operation in 2026, the BNetzA said. Germany’s wind industry earlier this year announced that no new offshore turbine will be built in national waters in 2021 for the first time in ten years. “With this tender, offshore wind power is finally gathering steam again,” said Stefan Thimm of offshore wind industry group BWO. Thimm argued awarding projects by a lottery could not be a satisfying solution, arguing competition over individual projects could be resolved by introducing contracts for difference (CfD), which are already used in other countries. These would allow bidders to claim low prices without having to bet on high power prices in the future. For Kerstin Andreae of energy industry lobby group BDEW, the zero support bids showed that auctions generally are an adequate tool for lowering renewable power costs but also stressed the CfDs would be a solution to resolve competing bids. “Deciding through a lottery is inacceptable for the industry,” Andreae said.
Offshore wind power is a key pillar of Germany’s emissions reduction plans and first zero support bids awarded greatly boosted investor interest in the technology. While offshore wind power expansion is quickly gaining traction globally, it has slowed down in Germany. By the end of 2020, a total of 1,501 turbines with a combined capacity of 7.8 GW were in operation in German waters, making the country the world's second-largest offshore operator behind the United Kingdom.