Germans cry foul as Danes dominate cross-border PV tender

Winning bids in a pioneering 50MW cross-border German-Danish PV tender fell to a – by European standards – very low €53.80/MWh ($57/MWh), but the process was criticised by Germany’s renewables sector over claims that it distorted competition.

The price was almost €20/MWh lower than the €72.50/MWh reached at the last round of German PV tenders.

All five winning bids were for ground-based arrays on agricultural land in Denmark, an outcome that caused irritation across the border.

“The first cross-border tender for renewable energies makes clear that rash and half-baked approaches lead to a distorted competition,” said Harald Uphoff, the temporary managing director of the Germany renewables federation BEE.

“The European Union forces member states to an opening up of markets without laying the groundwork for it.”

Conditions in the cross-border tender were not the same in both countries as Denmark allowed arrays to be built also on agricultural areas, whereas Germany didn’t, the BEE points out, adding that tax conditions in Denmark were also better.

Is utility-scale solar in Europe really ‘dead’?

Read more

The German-Danish cross border PV auction was the first in accordance with relatively new EU state-aid rules that encourage member states to open up 5% of the capacity to be installed each year via tenders to projects in other EU countries, depending on reciprocity and an agreement between the two co-operating nations.

Denmark will also open one auction round with a total capacity of 20MW to up to 2.4MW in bids for projects located in Germany.

EU plans to widen the cross-border share of tenders to 15% in coming years were also rejected by the BEE.

“You can’t force a common [energy] market with a crowbar. As long as cross-border tenders lead to such distorted competition, they aren’t suitable.”

The auction’s result, however, also shows that there still is a great cost-cutting potential if cheaper areas are included, stressed Carsten Körnig, the managing director of Germany’s solar industry federation BSW.

“Germany would do well to abolish restrictions that make solar energy in this country unnecessarily more expensive,” Körnig said.

Unsuccessful bids in the cross-border tender can participate again in the next 160MW German tendering round that closes on December 1, 2016, or for 2.4MW out of the 20MW Danish PV round that closes on December 8, 2016, Germany’s grid agency BNetzA said.

Read Next

German EEG levy jumps 8.3% as Energiewende costs reach €24bn

The levy German power consumers pay on their electricity bills to finance the build-up of renewables (EEG surcharge) next year will jump by 8.3% to €0.0688 ($0.0758) per kilowatt hour of electricity consumed, re-igniting a heated debate on the cost of the country’s energy transition.

14 Oct 2016