The price for winning bids in Germany’s first 709MW onshore wind tendering round this year rose after privileges for community power were removed, but fell for solar PV where no major change in rules took place, the federal grid agency BNetzA said.

“The increase of the winning bid level to €46.00 ($56.77) [per megawatt hour] makes clear that for previous bids – without a permit and construction times of 4.5 years – other technology and price developments had been assumed than for [current] bids that include permits and have construction times of 2.5 years,” BNetzA president Jochen Homann says.

The average support price across 83 winning bids in the onshore auction rose to €46.00/MWh from a record low average of €38.20/MWh at the last 1GW round in November, which was heavily impacted by exceptions for community power at auctions last year.

Citizen-led projects at tenders in 2017 were exempt from having to provide a permit in accordance with German sound emission rules before bidding, and also got two years longer to complete their projects.

As a result in particular of the longer construction times, community power bidders could speculate on larger turbines with a lower LCOE being on the market in time for the installation of their projects. The consequence was that more than 95% of all winning bids last year went to those groups, or developers hiding behind them.

After protests from the wind sector fearing a dangerous lull in installations starting in 2019, Germany’s parliament has waived the privileges for community projects for the first two tendering rounds this year.

"This round has confirmed that the corrected tendering design works and that the [winning] projects now will supply inexpensive electricity within two years," said Matthias Zelinger, managing director at VDMA Power Systems.

The group representing wind OEMs reckons that most winning projects of the February 2018 tender will be built next year.

But Zelinger cautioned that the waiver of the special conditions for community power now needs to be made permanent to also be valid for the latter two rounds in 2018, as well as auctions after that.

VDMA Power Systems also calls upon the current caretaker government in Berlin to raise the volume of this year's third onshore tender by 450MW, and of the fourth auction by 950MW as Germany's upper house of parliament - the Bundesrat - has proposed recently.

The group further demands that an additional 4GW volume will indeed be added to onshore wind tenders in 2019 and 2020 as agreed upon in a coalition contract between Chancellor Angela Merkel's conservatives (CDU/CSU) and their Social Democratic (SPD) partners.

The SPD rank and file still need to give their approval to the coalition, though, in an ongoing inner party referendum. The SPD plans to announce the result on March 4.

Europe's wind power industry group WindEurope also demanded that legislators should make sure that the end to the advantages for community projects must also apply to the planned additional auctions envisaged in the coalition agreement.

"Last year’s auctions are likely to cause a slowdown in new installations, and some of the projects may not happen. This will hit manufacturers and others in the supply chain. It’s unsettling to see that in Europe’s leading wind market. Lessons must be learnt," Wind Europe chief executive Giles Dickson said.

He added: “Germany also needs to look at the regional balance of onshore wind. It would be good to see the southern Bundesländer contributing more to the expansion of wind energy - and benefitting from the economic and social benefits wind energy brings to communities. It would also help from a transmission point of view. The auction design should facilitate a more balanced expansion of onshore wind.”

Another outcome of the February 2018 auction was a diminished appetite for new wind projects, which may or may not have to do with the waiver of community power privileges. The tender was still oversubscribed with 132 bids, representing 989MW, for 700MW on offer. But that was far less than the oversubscription seen in previous auctions.

“The decreasing number of bids shows that [a large demand in] tenders of wind turbines is not a foregone conclusion,” Homann says.

Solar prices still falling

In a simultaneous, but independent 200MW auction for ground-based solar PV projects, prices still showed a downward trend amid a stronger oversubscription.

The average price of 24 winning bids fell to €43.30/MWh, down from €49.10 in the last solar auction of 2017. With 79 bids and a volume of 546MW, the solar auction was clearly oversubscribed.

Eleven of the winning bids went to projects on agricultural land in economically deprived regions within the otherwise prosperous states of Bavaria and Baden-Württemberg.

German developer Juwi won with four solar projects with a combined capacity of 89MW, marking its re-entry into the German solar sector with a splash.

Above all lower panel prices have made ground-based PV profitable again in Germany, the company said.

"We notice that the solar market in general is gaining speed again," Juwi board member Michaerl Class said.

"Therefore, we are looking positively at the coming years, also as several federal states have opened up agricultural and green areas again for solar energy use."

Juwi, which is now owned by regional utility MVV, also was successful with four onshore wind bids with a combined capacity of more than 40MW.

The developer says the prerequisite of a sound emission permit in this round helped it to win those projects.

UPDATE adds comment by wind group, developer

Transition

Price rises in German onshore wind tender but falls for solar