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Wind and solar head opposite ways again at German auctions

A 675MW wind auction is undersubscribed with prices at the ceiling, while solar prices fall in oversubsribed 150MW auction

Germany’s latest wind and solar auctions once more went into completely different directions - with wind being undersubscribed and reaching top prices, while solar was oversubscribed with declining prices.

All 204MW in valid bids were successful in the latest wind auction – which was heavily undersubscribed as 675MW of volume was offered.

The lack of competition meant again that the average price for successful bids reached €62.00 per megawatt hour, which was also the ceiling price.

An ongoing permitting malaise, increasing bureaucratic hurdles and local protests have all contributed to the failure of recent German onshore wind tenders.

The government is trying to address the impediments with a series of measures recently announced, but at the same time plans to create additional hurdles through the introduction of a nation-wide minimum distance rule.

German cabinet deals body blow to onshore wind growth

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Germany's Green Party opposition said the government is doing everything wrong regarding the expansion of renewable energy.

"In solar energy, where things currently go relatively well, the government impedes investments in clean energy," said Julia Verlinden, the Greens' energy policy spokeswoman.

"Instead of finally raising tendering volumes in order to produce solar power for below 5 cents per kilowatt hour, the government put on a cap. The result is that three quarters of all bidders for solar projects were left empty-handed at this auctioning round."

The situation was indeed quite different for solar today, where an auction for 150MW in capacity was heavily oversubscribed as bids with a volume of 648MW came in.

That drove prices down, with the average price for winning bids reaching €45.90/MWh, down from €54.70/MWh at a previous auction.

Competition in the solar auction was more intense as more areas were being made available on agricultural lands in Bavaria, Germany’s largest state by territory and one of its sunniest.

"With wind energy it is the contrary," Verlinden said.

"Once more, far fewer projects were handed in than needed to meet the auctioning volume. ... The government finally must deliver more areas for wind energy and less bureaucracy. But it does the contrary. With a minimum distance of 1,000 metres between new wind turbines and settlements, as well as even lower expansion volumes [stipulated] in the climate package, in particular the Christian Democrats (Merkel's party) are blocking the transition to an energy supply of the future."

VDMA Power System, a group representing wind OEMs, pointed out that already six wind auctions since October 2018 have been undersubscribed.

"This crisis in the wind industry is endangering climate targets, jobs and value creation in Germany," VDMA Power Systems managing director Matthias Zelinger said.

Zelinger demanded from energy minister Peter Altmaier to scrap the distance rule from a series of measures he has presented recently to revive the stalled onshore wind expansion.

Mohid Prasat, project manager at analyst GlobalData, said one way for Germany to achieve its 2030 target of 65% of renewables in the power mix could be for companies to venture more into the market of subsidy-free solar developments.

Utility EnBW earlier this week took an investment decision for a 180MW solar array in Brandenburg state, which will be built without support and also become Germany's largest PV array.

"The project will not have guaranteed feed-in remuneration, ..., and with small solar PV installations starting to lose their eligibility for EEG's feed-in-tariffs (FITs) starting 2021 and overall cost of building solar PV plants going down, the country might witness a mushrooming of solar PV plants without subsidies."

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