Germany’s federal grids agency (BNetzA) has set higher maximum prices for onshore wind and solar rooftop tenders that are held next year, in order to revive demand among bidders who recently shunned auctions amid rapidly rising prices.
The agency set a new bidding price cap of €73.50 ($78.27)/MWh for onshore wind, and of €112.50/MWh for rooftop solar installations at tenders in 2023 after previous auctions for both technologies had been heavily undersubscribed.
The last auction was carried out with a €58.88/MWh price cap for onshore wind, and with a €88.40/MWh price ceiling for rooftop solar.
“The newly defined maximum values enable sufficient income for installations that participate in tenders in the coming year. I hope that the number of bids, which had fallen significantly, will increase again and that competition can develop again," BNetzA president Klaus Müller said.
He added that the agency is currently also preparing to raise the price cap for ground-based solar arrays in order to create “stable conditions for achieving expansion targets”.
Germany’s parliament earlier this month had widened the BNetzA’s competences to raise price ceilings by 25% instead of by 10% as previously granted.
The latest onshore wind and solar tendering rounds in Germany had met only lacklustre demand as many investors chose to refrain from putting in bids due to price ceilings which were deemed too high given massive recent inflation and rising interest rates that push financing costs up.
Only 3.2GW out of 4.6GW in onshore wind capacity on offer in 2022 were actually awarded – despite available construction permits – Germany’s wind energy federation (BWE) said, adding that a record 12.8GW is planned to be tendered off in 2023.
Raising the price cap to €73.50/MWh already for the first wind tender (with a 1 February 2023 bidding date) creates the basis for a broad participation, BWE president Hermann Albers pointed out.
“Even if there will be projects for which the maximum value does not yet create a sufficient basis in view of significant cost increases and further interest rate hikes, the majority will now be in a better starting position,” Albers said.
“The Federal Network Agency has thus drawn the right conclusions from the clearly undersubscribed tenders of the past year.”