EnBW, TotalEnergies Win in 2.5 GW German Offshore Wind Auction as RWE Bows Out

June 24, 2024, by Adnan Memija

Germany’s Federal Network Agency has awarded 2.5 GW of offshore wind across two areas in its latest auction that saw two bidders collectively pay EUR 3 billion for the opportunity to develop in the North Sea.

EnBW has secured the 1 GW N-12.3 area in the German North Sea. The company won the site at a price of EUR 1.065 million per MW, or EUR 1.065 billion in total.

A project company called Offshore Wind One GmbH, owned by the oil and gas major TotalEnergies, succeeded in bidding for site N-11.2 with an offer of EUR 1.305 million per MW or approximately EUR 1.96 billion in total.

Within the next twelve months, both companies must pay ten per cent to the German government.

RWE had initially teamed up with TotalEnergies for the auction but later announced that the French company would proceed with the project alone, as it would be leaving the consortium, according to Reuters.

An RWE spokesperson explained that the bid amounts did not align with their economic investment criteria and that the firm would instead focus on its 1.6 GW Nordseecluster cluster, for which a final investment decision has already been made, said Reuters.

Germany launched the tender for the two sites in January this year. The two areas are located in the North Sea, approximately 120 kilometres northwest of Heligoland. The wind farms are scheduled to go into operation in 2031.

In 2023, the average award value per gigawatt was EUR 1.8 billion, a figure that faced criticism from industry associations.

According to Germany’s Federal Network Agency, the implementation of the dynamic bidding process was necessary because nine bids with a bid value of zero cents per kilowatt hour were submitted for area N-11.2 and seven for area N-12.3 by the bidding deadline. A total of 46 bidding rounds were carried out for the first area and 55 for the second site.

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EnBW Won Rights for 1 GW N-12.3 Area

In a separate press release, EnBW said that it plans to sell much of the electricity produced by the 1 GW offshore wind farm to industrial customers in the future through power purchase agreements (PPAs).

“Even before construction work had started on our current ‘He Dreiht’ project, we had already marketed more than half of the electricity using PPAs,” said Peter Heydecker, Board Member for Sustainable Generation Infrastructure.

“Winning the auction represents another important milestone in the restructuring of our generation portfolio. We want to expand renewable energy capacity to between 10 and 11.5 GW by 2030 and be a climate-neutral company by 2035,” stated Georg Stamatelopoulos, CEO of EnBW.

“To this end, we are investing a total of 40 billion euros in the energy transition by 2030, around a third of our total investment alone in the construction of wind farms and solar parks as well as flexibly controllable and hydrogen-ready gas power plants.”

TotalEnergies to Take 1.5 GW Zone Solo

The site located off the German island of Heligoland covers an area of around 156 square kilometres.

Under the terms of this award, Offshore Wind One GmbH will pay, at the latest in June 2025, the German Federal government EUR 196 million, which will be allocated to marine conservation and the promotion of environmentally friendly fishing.

An annual contribution of EUR 88 million will also be paid to the electricity transmission system operator in charge of connecting the project, for a term of 20 years starting from the commissioning of the site, according to the oil and gas major.

The concession will run for a term of 25 years, extendable to 35 years.

“Building upon the successful award of concession N-12.1 in the German North Sea last year, the award of the N-11.2 site will enable TotalEnergies to establish a 3.5 GW offshore wind energy hub, building on the quality of both sites and taking advantage of the development and operational synergies between them,” said Stéphane Michel, President Gas Renewable and Power of TotalEnergies.