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Germany’s latest 2.5 GW offshore wind auction failed to attract any bids, leading the German Offshore Wind Energy Association (BWO) to call for a fundamental overhaul of the auction design.
The auction, which ended on 1 August without an award, covered two sites, N-10.1 and N-10.2. A total capacity of 2.5 GW was planned to be installed on the two sites, enough to supply nearly all households in Cologne, according to the German Federal Maritime and Hydrographic Agency (BSH).
“The industry has been warning for years against burdening companies with too many risks. However, the legal requirements no longer take into account the framework for investments in offshore wind projects in Germany. The current auction design forces developers to bear risks beyond their control without any protection,” said Stefan Thimm , Managing Director of BWO.
Thimm also added that the German offshore wind market is currently not attractive to investors, resulting in missed opportunities for value creation and job growth in Germany and across Europe. He said that the industry would invest more than EUR 200 billion in offshore wind by 2045 with the right regulatory framework.
“ This urgently requires a course correction in auction design and a systematic elimination of bottlenecks, for example in port expansion and the modernization of seaports,” said Thimm .
Thimm noted that the federal government should introduce Contracts for Difference (CfD) along with the long-term power purchase agreements (PPAs).
“Contracts for Difference lead to a reduction in electricity generation costs of up to 30 percent – the basis for competitive electricity prices. Without this reform, further auctions could fail – and with them the energy transition.”