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German auction design 'is killing wind sector'

Germany must lift its annual 2.9GW cap on onshore installations and repair flaws in its tendering system to avert major damage to the wind industry, leading executives told the WindEurope 2017 conference yesterday.

Europe’s largest wind market will lose more than 2.5GW in installations in the coming two to three years as a result of a change in 2017 to tenders from a previous feed-in tariff, said Enercon managing director Hans-Dieter Kettwig.

Germany must boost its annual onshore auction volume beyond 2.9GW from next year, “otherwise the industry has a tough situation”, he told delegates.

“Politicians must react very soon in Germany — but very soon at this moment is not so easy,” Kettwig added, referring to the difficult path to form a new government after three-way coalition talks between Chancellor Angela Merkel’s CDU, the liberal FDP and the Greens failed.

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The annual cap on new installations managed by the tendering system is particularly damaging due to exceptions for community wind groups, which don’t need to provide a sound emission permit when bidding, and get two years longer than commercial developers to build their wind projects.

“The design of the German auctioning system really kills the wind industry,” Holger Koschorz, vice-president for public affairs at wind turbine maker Senvion, told Recharge yesterday, pointing out that almost all of the winning bids in Germany’s most recent onshore tender were from community groups. These organizations do not have to start construction on their projects for two or three years and suffer little consequence if they never get built — unlike commercial developers.

“There is no penalty that really hurts if a project is not built,” Koschorz said. “There is no fair competition.”

According to Koschorz, community developers are planning a kind of follow-up auction among turbine makers to achieve the lowest possible price.

Without a clear political commitment, Europe’s leadership in wind power is at risk, WindEurope chairman Ivor Catto told the opening session yesterday.

“We are starting to see the growth of jobs stagnating,” he said, pointing to the more than 260,000 jobs the wind sector is providing in Europe now.

“In this context, the negotiations on the [European Commission’s] clean energy package is importantly entering that final stage.” 

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