Published on February 20th, 2019 | by Joshua S Hill0
Germany Awards 476 Megawatts In Latest Undersubscribed Onshore Wind Auction
February 20th, 2019 by Joshua S Hill
Germany’s latest onshore wind tender was again undersubscribed with only 476 megawatts (MW) of capacity being awarded of an available 700 MW even as the country’s solar tender was oversubscribed by two and a half times.
Germany’s renewable energy auction tenders have been facing a lot of criticism of late with wildly varying results, including shifting prices and under-subscribed capacity allotments. In the past 12 months, Germany’s Federal Network Agency, the Bundesnetzagentur (BnetzA), has now held four onshore wind tenders, and while prices have fluctuated only marginally — averaging €61 per megawatt-hour (MWh) for this latest auction, as compared to €63/MWh in October 2018 and €57/MWh in May 2018 — it is the third onshore wind auction in a row that has been under-subscribed.
According to Jochen Homann, President of the Federal Network Agency, the tendered volume for this latest auction was 700 MW, but only 72 bids with a volume of 499 MW were submitted, and the Bundesnetzagentur awarded only 67 contracts for a volume of 476 MW. Bids ranged in value from €52.4/MWh to €62/MWh.
The problem facing Germany’s onshore wind sector, as diagnosed by WindEurope, the region’s wind energy trade association, is the country’s permitting process, which continues to get longer and can now take over two years to complete, as compared to only 10 months around two years ago. Further, according to WindEurope, even projects that receive a permit are increasingly being challenged in the courts, with at least 750 MW worth of onshore wind projects currently stuck in legal proceedings.
“This is now the 3rd German onshore wind auction in a row that’s been under-subscribed,” explained WindEurope CEO Giles Dickson. “It’s clear the permitting process is not fit for purpose. It’s taking longer and longer to get a permit. The Bundesländer are reluctant to identify new locations for wind farms. And even if wind farms do get a permit, many then get caught up in legal disputes, which is pushing up costs.
“The German Government needs to take urgent action to make permitting easier. And the Bundesländer need to identify appropriate new zones for onshore wind. If they don’t, auctions will continue to be under-subscribed, and prices will remain higher than they should be. And this will jeopardise Germany’s target of 65% renewables in electricity by 2030.”
Germany’s Bundesnetzagentur also announced the winning bids in the year’s first solar tender, which was a complete mirror image of the onshore wind results. The advertised tender amount was 175 MW, but the Bundesnetzagentur ended up awarding 80 bids with a total capacity of 465 MW, oversubscribing the tender by almost two and a half times. Average price for the solar contracts was €48/MWh with a low bid of €41.1/MWh and a high of €51.8/MWh.
“The first free-of-charge solar parks under planning, as well as the results of the latest photovoltaic auctions, show how inexpensive and efficient solar energy has become,” crowed Carsten Körnig, Managing Director of the German Solar Industry Association. “The time is right to eliminate existing solar investment barriers in the city and in the countryside and to align the renewable energy development targets to the new energy and climate targets.”
“The recent German renewables tender shows the incredible cost-competitiveness of solar,” added Walburga Hemetsberger, CEO of SolarPower Europe, who responded to my request for comment via email. “Not only was solar the cheapest in price, but the solar tender was also strongly oversubscribed, attracting bids for 465 MW compared to the targeted 175 MW. The German solar market has grown significantly during the past year, up to nearly 3 GW in 2018 from 1.76 GW in 2017, this is another sign that solar is going strong in Germany.”