German auction for renewables with storage attracts wind projects, with strong interest overall

In September, Germany held this year's second and final auction round for renewable energy sources combined with storage. Unlike the previous round, investor interest was very strong, similar to the second round last year. While previous auctions, with the exception of the very first one, attracted only solar PV projects with storage, this year's second round also saw several projects involving wind power.

Germany offers renewable energy developers a relatively wide range of auctions in which they can secure operating support for their projects. These include so-called innovation auctions, which are open only to projects incorporating storage, most often batteries. Although various renewable energy sources can participate in these auctions, photovoltaic projects have dominated them from the outset.

For this year's second round, the German Federal Network Agency (Bundesnetzagentur) put 583 MW of capacity up for competition. According to the regulator, 154 projects with a total installed capacity of 1856 MW were submitted to the auction, a record volume. The regulator said the auction received the first-ever projects combining wind farms with storage, in this case 91 MW. However, none of the projects using wind turbines secured a contract in the auction.

"The strong oversubscription in this innovation auction reflects a trend we have already observed in standalone auctions for ground-mounted solar PV. The high level of participation gives us hope that the development of renewable energy sources will also stabilise in this segment," said Klaus Müller, president of the German regulator.

In the end, 50 projects with a combined installed capacity of 587 MW secured support. Awarded prices ranged from 67.4 to 74.5 EUR/MWh, with a weighted average of 70.9 EUR/MWh. This is a significant drop compared with the previous round, which averaged 83.3 EUR/MWh, although that auction was not fully subscribed. As in previous rounds, the auction was dominated by sunny southern Germany, with 227 MW awarded in the state of Bavaria, followed at a distance by Mecklenburg-Western Pomerania with 115 MW.