German grid agency BNetzA has launched the first round in a new series of offshore wind auctions that will see close to 10GW in capacity tendered off by 2025 to meet the country’s recently hiked offshore wind target.

The agency is offering 958MW in grid connection capacity across three areas in the North and Baltic Seas, at a maximum support price of €73 ($88) megawatts per hour. Bids can be handed in until 1 September 2021.

“In addition to funding and network connection capacity, the tender also includes the right to apply to the BSH (Germany’s maritime and hydrographic agency) for planning approval,” BNetzA president Jochen Homann said.

“A total output of almost 9.7GW is to be tendered off by 2025 in order to achieve [Germany’s] expansion target for offshore wind energy of 20GW by 2030.

“Offshore wind energy is an essential pillar for the success of the Energiewende (energy transition)."

Out of the total capacity on offer, 658MW will be in the North Sea and 300MW in the Baltic Sea in areas called N-3.7, N-3.8 and O-1.3. Successful bidders will have to complete construction in 2026.

Germany in 2017 and 2018 had auctioned off a total of 3.1GW in pre-developed offshore wind acreage, with developers having to compete with different areas.

Starting this year, Germany will hold regular offshore wind auctions under what it calls a “centralised model,” under which the state pre-develops set offshore wind zones before the tenders.

Entry rights for Iberdrola, Northland Power

There is an exception in the 2021 auction, though, as for two of the three areas in the tender, there are legal entry rights of companies that originally planned offshore wind farms there.

A company with a legal entry right after the auction can match the winning bid and thus snap away the zone from whoever would have succeeded in the auction otherwise. The rule was introduced as a compensation for companies that had incurred development costs for an area, but still didn't win with that project in the 2017 or 2018 auctions for pre-developed zones.

Spanish utility Iberdrola had pre-developed the Windanker project in the Baltic Sea, which the BNetzA told Recharge is equivalent to the O-1.3 zone now entering the auction. Iberdrola therefore has the legal entry right for the area, which is close to its already operating Wikinger array.

The second area with a legal entry right attached to it is the N-3.8 zone, or Nordsee Two, the BNetzA said. German utility RWE in 2014 had sold an 85% stake in the project to Canada's Northland Power.

Higher offshore target

Germany’s government recently has raised its 2030 offshore wind target to 20GW (from 15GW previously envisaged) in order to meet stepped-up climate targets, and for the first time introduced a target for 2040, of 40GW.

The higher target also means that the BNetzA has to increase the volume of planned offshore wind auctions. Under the old target, the agency had planned to auction off 700-900MW of capacity each year from 2021 to 2025.

Under a new schedule for auctions contained in the latest area development plan of Germany's Maritime and Hydrographic Agency (BSH), to reach the new 20GW target by the end of 2030 the grid agency will have to adapt its tendering schedule, with greater volumes to be auctioned off towards the middle of the decade.

After the first 'centralised' auction this year, the BNetzA under the revamped plan will need to tender off roughly the same amount next year and in 2023, to be followed by a 2.9GW auction in 2024, and 4GW in 2025. Successful bidders have five years time until the commissioning of their projects (see fact box below).

Also in coming years, the BNetzA will auction off areas for which companies "potentially" have legal entry rights, but the agency didn't tell Recharge which those areas are and said it will verify that ahead of each auction.

UPDATED to add detail on legal entry rights

Wind

Germany plays catch-up with first round of new 10GW offshore wind auction push