Bids go lower than expected in Germany's 1st offshore wind tender

The average winning bid in Germany’s first tender for offshore wind subsidy, targeting 1,550 MW of capacity, arrived at just EUR 0.44 cents per kWh.

The Federal Network Agency (Bundesnetzagetur) said today it received four bids for 1,490 MW of capacity in total, all of which in the North Sea. The list of bidders includes Dong Energy Borkum Riffgrund West II GmbH, EnBW He Dreiht GmbH, Gode Wind 03 GmbH, and Northern Energy OWP West GmbH.

The auction awarded both long-term subsidy under the EEG and grid connection capacity, paid by electricity consumers, for power plants coming online after December 2020.

The average rate achieved was surprisingly low, said Bundesnetzagetur president Jochen Homann. "This shows the auction has unlocked medium and long-term cost reduction potential, which will lead to a reduction in funding to an extent that had not been expected."

The highest bid received was for EUR 6 cents per kWh of subsidy, while the lowest was for zero cents.

The 60 MW that were not subscribed for now will be left for the next offshore wind tender, scheduled for April 1, 2018. Of the 3,100 MW of total capacity in the two tenders, 500 MW has to be in the Baltic Sea.

In 2021-2025 the German government wants to limit offshore wind installations as it needs time to complete high-voltage transmission projects. At the end of 2016 the country had 4.11 GW operational.

(EUR 1 = USD 1.06)

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