The offshore wind industry has demanded additional auctions and the introduction of contract for difference (CfD) style tenders to overcome a lull in Germany’s offshore wind construction, as a mere 219MW was added during the first half of 2020.
That brought the country’s cumulative capacity for wind at sea to 7.76GW, data from the Deutsche WindGuard consultancy showed.
After initial auctions in 2018 and 2019 for pre-developed zones in the North and Baltic Seas, Berlin didn’t live up to a promise to hold additional offshore wind auctions for other areas that already have a grid connection, while regular auctions for new areas will only start next year.
“Especially against the background of the small additions, we welcome the fact that the anchoring of a 20GW offshore wind energy [target] by 2030 and 40GW by 2040 now creates long-term planning security,” said a joint statement by five leading wind groups (BWE, BWO, VDMA, WAB and the Offshore Wind Foundation).
“With increased expansion targets, offshore wind energy strengthens climate protection and creates economic development.”
Germany’s government in June raised the country’s offshore wind ambition to 20GW by 2030 and 40GW by 2040, but the targets still need to be approved by parliament. At the same time, Chancellor Angela Merkel’s cabinet to the shock of the sector introduced the possibility of negative bidding at future tenders for wind at sea.
“The change planned in the Wind at Sea Act amendment with the second tendering component [negative bidding] increases investment costs and thus also the levelised cost of electricity (LCOE),” the wind groups warn, warning that job losses could follow if German industrial firms were to go abroad.
Instead, the wind groups demanded to follow the lead of the UK, France, Italy or Denmark and also introduce CfD in Europe’s largest economy.
In that context, “it is important to check whether a connection is possible with power purchase agreements (PPA) or other marketing tools,” the groups said.
“CfDs designed in this way ensure a more cost-effective expansion of offshore wind energy, and combined with competitive tenders prevent excessive support and guarantee low and stable electricity costs in the long term."
CfDs could lower German offshore wind costs by about 30% compared to the costs to be expected if the rules proposed by the government were to prevail, the wind groups claim.