Germans Asking for Offshore Wind CfD and Capacity Target

The Association of German Wind Farm Operators (BWO) and WAB are calling for a long-term reliable investment and financing framework for offshore wind projects in Germany that would require the introduction of contracts for difference (CfD) and dialogue on a long-term expansion target until 2035. 

In their joint letter sent to the German Federal Ministry of Economics and Energy, among others, the parties emphasize the willingness of the offshore wind industry to take responsibility for the rapid recovery of the economy after the Corona crisis.

According to BWO, electricity from offshore wind is now more cost-effective than almost any other technology, and the introduction of CfD will make it possible to reduce electricity generation costs by another 30% compared to refinancing via Power Purchase Agreements (PPAs).

“Only if the 20 GW offshore wind by 2030 target is finally anchored in law, we will have a realistic chance of achieving our climate targets at all,” said BWO Managing Director Stefan Thimm.

“Stable investment conditions based on Contracts for Difference would not only strengthen the domestic small and medium-sized businesses, but also relieve the burden on the consumer and thus strengthen the international competitiveness of electricity prices.”

The focus now needs to be directed beyond 2030, the associations said, asking for long-term expansion targets up to at least 2035 and the development of a domestic market for “green” hydrogen from offshore wind.

In order to enable a progressive and competitive start after the crisis, the first offshore wind projects should be put out to tender at short notice. In the medium term, 2 GW of added capacity per year are realistic, and this should be considered in the Wind Energy at Sea Act (WindSeeG), the letter writes.

To remind, the German federal government, the coastal states, and the transmission system operators recently signed a joint agreement to raise country’s offshore wind capacity target from 15 GW to 20 GW by 2030.