Another German wind auction is fully subscribed, but prices fell only slightly

Germany has held the first of this year’s four planned auctions for onshore wind farms. As in the previous round, the auction was fully subscribed, which also had a positive impact on the prices awarded. After several years of poor results, when the country was plagued by a significant shortage of projects, the situation is finally turning around thanks to a larger project pipeline.

Wind power, alongside photovoltaics, is one of the pillars of Germany’s Energiewende, the transformation of its energy sector. By the end of last year, Germany already had more than 63 GW of installed onshore wind capacity. Germany has a further roughly 9 GW installed offshore. For many years, the main tool for developing wind power in Germany has been an auction system, with several rounds held each year.

The country has scheduled a total of four rounds for onshore sources this year, the first of which took place in February. In this round, the German regulator put almost 4.1 GW of installed capacity up for auction, although the volume of bids submitted was higher. As in previous rounds, the regulator did not reduce the auction volume, due to the large number of projects.

According to the German regulator, developers submitted more than 500 projects totalling almost 4.9 GW of capacity in the first round of this year. This is the third consecutive round in which the volume of submitted projects has exceeded the auction volume by a comfortable margin.

“Fortunately, the trend of oversubscribed auctions is continuing in the wind power sector. Competition makes it possible to achieve lower prices. Overall, this is good news for the development of renewable energy,” said Klaus Müller, president of Germany’s grid regulator.

A total of 422 bids, with combined installed capacity of 4.09 GW, were ultimately successful in the auction. Awarded prices ranged from 56.2 to 71.3 EUR/MWh, with a weighted average of 70 EUR/MWh. Compared with the previous round, this is a decrease of 1.5 EUR/MWh, meaning prices remain close to the auction price cap of 73.5 EUR/MWh.

As usual, the largest number of successful projects was in northern Germany, particularly in the federal state of North Rhine-Westphalia (1266 MW). Next came Lower Saxony (475 MW), Brandenburg (443 MW) and Saxony-Anhalt (334 MW).