Average Price Hits €61.6/MWh In Latest German Onshore Wind Auction
The average price awarded in Germany’s third onshore wind auction this year climbed slightly to €61.6 per megawatt-hour (MWh) due primarily to the country’s lengthy permitting process, according to experts.
Germany’s Federal Network Agency, the Bundesnetzagentur (BNetzA), published the results for its third onshore wind auction last week in a tender process which “was slightly oversubscribed,” according to Jochen Homann, the BNetzA’s President. However, “every allowed bid was awarded a contract,” Homann added, meaning that nearly 700 MW was awarded a contract.
The bids ranged in value from €40/MWh to €63/MWh, with an average of €61.6/MWh. Unfortunately, this is slightly up on the second auction held in May and well up on the February auction, which received average bids of €57.3/MWh and €47.3/MWh respectively.
Commenting on the announced bids, Giles Dickson, CEO of the European wind energy trade body WindEurope, explained that the increase “is mainly due to the lengthy permitting procedures that deterred some investors and reduced the competition.
“But it’s also because of the continued lack of clarity over the design of future auctions which is undermining investor certainty in the sector,” Dickson continued. “It is essential the German Government gives early clarity on annual wind energy volumes, permitting rules, and auction design as part of their 2030 National Energy Plan. This will go a long way in putting Germany on track towards its 65% renewable energy goal for 2030.”
Contributing to the lack of clarity evident in this, the country’s third onshore wind auction of the year, was the decision made by the German Government to temporarily modify the rules for 2018’s auctions to requesting compulsory environmental permits for community projects. A fourth auction under the same rules is set for October.
WindEurope was unable to comment directly on this announcement at the time of publishing, but I was directed to comments made last month by WindEurope Chief Policy Officer Pierre Tardieu, who said: “In Germany it’s good that projects now need a permit to bid into onshore auctions, but that rule now needs to be made permanent. Also, there’s no clarity yet on when the 4 GW new onshore wind promised in the coalition agreement for 2019-20 is going to be auctioned. And the new Government is slow in confirming the auction volumes beyond that. Like all Member States, they now need to give five years’ visibility on future auction timetable and volumes – under the terms of the new Renewables Directive.
“This visibility is key to the supply chain and to keep wind energy jobs and growth in Europe. Investments in manufacturing, skills, and R&D only happen when governments give long-term visibility to the supply chain. This clarity helps them to make new investment decisions and bring down costs. Addressing these issues will be key to enable Europe to meet its target of 32% renewable energy by 2030 cost-effectively.”
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