No bids in German offshore wind round as industry body blasts auction design
Offshore wind association chief calls for Germany to switch to 'reliable' Contracts for Difference system for future auction rounds
Germany has become the latest European nation to endure a humbling no-show of developers in an offshore wind tender, as a local industry body slammed an auction design that it said made the disastrous outcome a “foregone conclusion”.
The German Federal Network Agency announced today that the 2.5GW tender for two offshore wind areas – N-10.1 and N-10.2 – had ended without a single bid.
This is the first time that a German offshore wind auction has failed in this way, the Federal Association of Offshore Wind Energy (BWO) said in an announcement in reaction to the result.
The German Federal Maritime and Hydrographic Agency had marked the two sites, which together cover 182 square kilometres in the North Sea, in January.
N-10.1 covers 151 sq km with a planned installed capacity of 2GW, while N-10.2 covers 31 sq km with a planned capacity of 500MW.
Commissioning for the two sites was set for 2030 (for N-10.2) and 2031 (for N-10.1). The auction deadline for the sites passed on 1 August.
There had been warnings from industry figures – including at the BWO – that Germany’s continued use of negative bidding was setting this and other auction rounds on a course for failure.
Following the outcome of the most recent round, Stefan Thimm, BWO managing director, said the fact there were no bidders in the tender was a “foregone conclusion.”
“The industry has warned for years that too many risks are being placed on developers,” he said. “The current rules force developers to shoulder risks beyond their control without any safeguards.”
"The result sends a clear message: The German offshore wind market is currently not attractive to investors. The federal government is thus missing the opportunity for significant value creation and employment in Germany and Europe.”
If Germany can get its framework right, then Thimm said industry will invest more than €200bn ($232bn) in expanding offshore wind by 2045. “This urgently requires a course correction in auction design”.
"Specifically, we demand the following regarding the auction design: The federal government must finally pave the way for a reliable Contracts for Difference (CfD) system alongside long-term electricity supply contracts.”
A CfD system could help cut power generation costs by up to 30%, “the basis for competitive electricity prices,” said Thimm. “Without this reform, future auctions are also at risk of failure — and with them, the energy transition.”
He also called for a “systematic elimination of bottlenecks, for example in port expansion and the modernisation of seaports.”
Germany has now joined an expanding list of European countries that have presided over offshore wind auctions that failed to attract a single bidder in recent years amid increasingly challenging economic conditions for the sector.