The bid prices in Germany’s second onshore wind round in 2018 rose to an average of €57 per megawatt-hour (MWh), slightly up on the €47.3/MWh which was recorded only a few months ago in February, in a surprisingly undersubscribed tender process.
The German Federal Network Agency, known as the Bundesnetzagentur (BNetzA), announced last week the results of its second tender for onshore wind energy, which saw 604 MW allocated across 111 bids, undersubscribing the 670 MW that the BNetzA had allowed for.
The average support price for the tender was €57.3/MWh, up on the first 2018 auction’s €47.3/MWh which was recorded during the country’s first onshore wind tender held in February, at which more than 900 MW was awarded. The lowest bid price was €46.5/MWh and the highest bid was €62.8/MWh. The new average tender price is back around the same price seen in May of 2017 which saw an average price of €57.1/MWh, but of more interest is the fact that the second onshore wind auction held in 2017 provided an average bid price of only €38/MWh.
One of the potential catalysts for this undersubscribed tender was the temporary new rules put in place this year, which required community projects to have an environmental permit before bidding, and decreasing the project development lead-time. According to the BNetzA, 15 successful bids worth 113 MW went to civic energy companies. The full list of successful bids can be seen here.
“The easy signing of a tender confirms the trend of the last rounds with decreasing bid volumes,” explained Jochen Homann, President of the Federal Network Agency (English translation provided by Google.) “The increase in support compared to the February call for tenders should give bidders more incentives to participate in future tenders.”
The temporary rules and the steadily increasing average bid prices being awarded in February and now May have some concerned, but European wind energy trade body WindEurope is cautioning patience.
“Prices are slightly up on the last German onshore wind auction,” explained WindEurope CEO Giles Dickson in the group’s press release commenting on the German tender.
“It’s the second of two auctions being run under temporary new rules. These new rules are good, because they require all bidders to have a permit including community projects. But we don’t know yet what rules will apply for future auctions. That’s created uncertainty. Which has made bidders cautious. Hence this auction ended up undersubscribed and with higher prices. We look forward to a more stable climate when the Government introduces permanent and uniform auction rules. Other European governments should take note and learn from the German experience in their own transition to auctions.”
Among the winners of the auction was German utility company EnBW, which was awarded three onshore wind projects totaling nearly 20 MW. Two of the projects are located in the state of Baden-Württemberg — a 6.6 MW project made up of two turbines, and a 3.3 MW expansion consisting of one turbine — and a third project in the state of Brandenburg — a 9 MW project made up of 3 wind turbines.
“We are very pleased that we were able to prevail in this tender round with all projects submitted by us,” said Dirk Güsewell, Head of Portfolio Development at EnBW. “In doing so, we see ourselves not only confirmed in our bid strategy, but once again in the competitiveness of our project development. With a total of six supplements in Baden-Württemberg – two of them for us – today’s tender results are also a good and important signal for our home market. We will now do our utmost to swiftly implement the projects and thus make another contribution to the successful expansion of our onshore portfolio.”
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