The German solar industry has walked away the sole winner from Germany’s most recent solar and onshore wind tender, receiving contracts for the entire 210 megawatts (MW) awarded in an auction which was heavily oversubscribed.
Germany’s Federal Network Agency, the Bundesnetzagentur, announced last week the results from its most recent joint tender for solar and onshore wind projects. Germany currently conducts numerous auctions each year, some of which are technology-specific and others which are technology-neutral. Already this year the Bundesnetzagentur has awarded 476 MW worth of onshore wind contracts in a significantly undersubscribed tender, and another 505 MW of large-scale solar at an average price of €0.065 per kilowatt-hour (kWh), in an oversubscribed tender.
Announced last Thursday, the Bundesnetzagentur revealed that it had awarded 210 MW of solar contracts to 18 solar power bids in the joint solar and onshore wind tender. The tender was originally for a flat 200 MW but was significantly oversubscribed at 719.5 MW worth of solar projects bidding for contracts. No onshore wind contracts were awarded.
Of the 210 MW worth of contracts awarded, 59 MW was awarded to both the states of Saxony-Anhalt and Brandenburg — each with five successful bids — another 48 MW to the state of Schleswig-Holstein with three bids, 33 MW to Mecklenburg-Vorpommern with two bids, and 10 MW to the state of Hesse with another three bids.
The average awarded price was €0.0566 per kilowatt hour (kWh), with a low bid price of €0.045/kWh and a high of €0.061/kWh. The prices were up slightly on the November 2018 preliminary rounds of €0.0527/kWh, but must also be understood in conjunction with the special tender for solar held last month, which awarded contracts at an average of €0.065/kWh.
A separate tender was also held for biomass plants, which awarded 27 MW in a severely undersubscribed auction.
While the most recent tender results are obviously good news for Germany’s solar industry — and representative of the industry’s strength, considering just how thoroughly oversubscribed the tender was — the auction continues to ring a warning bell for the country’s wind industry, specifically regarding the policies surrounding the development of new projects. As was highlighted in February in the wake of the first onshore wind tender of 2019, Germany’s permitting process for new onshore wind projects is hampering growth, as new permits can now take over two years to complete. Further, wind projects which do receive permits are increasingly being challenged in courts, further hampering development, with at least 750 MW worth of onshore wind projects held up in legal proceedings as of February.
“This is now the 3rd German onshore wind auction in a row that’s been under-subscribed,” explained WindEurope CEO Giles Dickson in February. “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.”