Germany Sets Offshore Wind Targets, Tweaks Tendering Procedure

German federal parliament (Bundestag) has passed an amendment to the Offshore Wind Energy Act (WindSeeG) which sets the country’s operational capacity targets to 20 GW by 2030 and 40 GW by 2040.

The amendment was introduced by the Federal Ministry of Economic Affairs and Energy (BMWi).

“With the target increase for offshore wind farms, it is clear that Germany will remain a leading market for offshore wind energy. With clear long-term goals, we provide planning and investment security,” Peter Altmaier, Federal Minister for Economic Affairs and Energy, said.

The amendment also now allows for non zero-subsidy bids to be submitted in future tendering rounds.

Originally, the Offshore Wind Energy Act, passed in 2017, stipulated that the lowest strike price in a previous tendering round must be the highest strike price in the next round.

Seeing that the last two auctions in Germany saw successful zero-subsidy bids, this meant that only zero-subsidy bids would be allowed in the future, which has now been amended.

Based on technology costs and taking into account the cost-relevant characteristics of the areas to be put out to tender, there is a possibility that the future tendering rounds might not attract zero-subsidy bids.

”On this basis, section 23a of the amendment now sets a maximum value of 7.3 ct/kWh was determined for the areas to be put out to tender in 2021, a maximum value of 6.4 ct/kWh for the areas to be put out to tender in 2022 and a maximum value of 6.2 ct/kWh for the areas to be put out to tender from 2023,” wind energy agency WAB shared with offshore WIND.

In case an auction round attracts more than one zero-subsidy bid, the winner of the tender will be determined by means of a lottery. This is a different approach compared to the initially proposed second bidding round in which the developers with identical bids would pay the government for the right to develop their projects.

This option has now been postponed and will be re-evaluated by 2022. The amendment also opens a possibility for the Contracts for Difference (CfD) model which is the option championed and preferred by the German offshore wind industry.

”The new long-term expansion target of 40 gigawatts by 2040 is an important planning basis for value creation and employment along the entire offshore wind supply chain,” Heike Winkler, WAB’s Managing Director, said.

However, WAB has once again called on the German government to tackle the current gap in the offshore wind expansion by quickly scheduling special tenders previously announced in the coalition agreement.

”We now need to be empowered to build new offshore wind farms as quickly as possible with a short-term additional tender, as stipulated in the federal government’s coalition agreement. The domestic supply chain finally needs to be utilised to its full capacity again,” said Winkler.

Germany had around 7.7 GW of installed offshore wind capacity at the end of June 2020.