Danish and German utilities Dong Energy and EnBW won with three and one bids respectively in Germany’s first offshore wind tender for 1.49GW of capacity – with EnBW winning with one and Dong with two subsidy-free bids of €0/MWh.

EnBW says its zero-subsidy plan for the 900MW He Dreiht project in the North Sea was made possible as the array is only planned to be commissioned in 2025, giving the utility the chance to profit from a rapidly-advancing development of technology in the wind industry.

The vicinity to the company’s Hohe See and Albatros projects also allowed for synergy and cost cutting effects that will lead to exceptionally low power production prices, EnBW adds. The three projects will have a combined capacity of 1.5GW.

"Our bid demonstrates that integrating offshore technology into the market by the middle of the next decade is possible and that offshore wind energy can make a significant contribution towards Germany meeting its energy and climate policy targets," said EnBW CEO Frank Mastiaux.

Dong later on Thursday revealed that it also won with two subsidy-free bids - for its OWP West and Borkum Riffgrund West 2 projects that each have a capacity of 240MW - and with a bid for its 110MW Gode Wind 3 project for which it will receive €60/MWh.

“We’re pleased with being awarded three projects in the first of two German auction rounds, and we have good opportunities to add further capacity to our winning projects in next year’s German auction," Dong chief executive Samuel Leopold says.

"Today’s results contribute to our ambition of driving profitable growth by adding approximately 5GW of additional capacity by 2025.”

The four winning bids had a combined volume of 1.49GW, Germany’s federal grid agency BNetzA said.

“At 0.44 ct/kWh the average weighted winning bid is way below expectations,” BNetzA president Jochen Homann said.

“The tendering system thus has freed mid- and long-term cost cutting potentials that will lead to an unexpected lowering of support.”

Because in Germany part of the grid-connection cost is included in the bid, industry experts had considered it unlikely that the German tender for pre-developed sites would render results as low as recent Dutch and Danish offshore tenders, which had set previous record lows of €54.50/MWh and €49.90/MWh respectively.

The Dutch and Danish tenders are not directly comparable, however, as prices in both countries are for the overall power price, while in Germany the tender was just for the subsidy, with companies receiving the wholesale power price on top of that.

As only 1.49GW in projects won, even though the maximum capacity had been set at 1.55GW in the tender, the BNetzA will offer an increased volume of 1.61GW at its second tender for pre-developed sites to be held in April 2018. Of that, 500MW will be reserved for the Baltic Sea.

BNetzA’s Hohmann said the outcome proved the competitiveness of offshore wind and is welcome news for German power consumers, who finance the support for the projects via a renewables surcharge (EEG surcharge).

“But it remains to be seen whether such low winning bids can be repeated in the next tender,” he cautioned.

Note: Update corrects an earlier version which referred to a €44/MWh average price for the tender

Second update adds comment by Dong which also won with subsidy free bids

Wind

EnBW and Dong win 1.49GW in German offshore wind tender