Even fierce competition in German solar auction failed to halt price rises

The December round concluded last year's series of auctions supporting the construction of ground-mounted solar PV in Germany with strong participation. The volume of projects submitted was almost twice as high as in the previous round. However, even above-average competition failed to push awarded prices down again. They therefore edged up for the second consecutive round.

Germany held a total of three rounds of separate auctions last year to support ground-mounted solar PV. Together, they offered almost 7.3 GW of capacity for bidding. The final round, held in early December, accounted for 2.33 GW. The final round of last year was marked by strong competition, with developers submitting 634 projects with a total capacity of 5.24 GW.

The volume of bids submitted thus exceeded the auction volume by more than twofold. However, Germany's Federal Network Agency, Bundesnetzagentur, had to exclude 61 bids—more than a tenth—from the auction. Ultimately, 262 projects with a combined capacity of 2.34 GW secured operating support.

“After two rounds with a declining number of bids, twice as many bids were submitted in this round as in the previous one. The strong participation shows that the framework conditions for the auctions are attractive,” said Klaus Müller, president of the Federal Network Agency.

Despite the substantial oversubscription, prices did not fall compared with the previous round. According to the regulator, awarded prices ranged from 44 to 53 EUR/MWh, with a weighted average of 50 EUR/MWh. Compared with the average of 48.4 EUR/MWh in the previous round, this represents a slight increase. Awarded prices have thus risen again, as they did in last August's auction.

As usual, Germany's sunnier south dominated regionally, with Bavaria in first place (901 MW), followed by the federal states of Saxony-Anhalt (282 MW) and Brandenburg (216 MW) in the northern part of the country.

Projects along railways and motorways, or on low-quality farmland, dominate

In recent years, Germany has sought to use land for solar PV that has limited potential for other purposes. Around half of the awarded capacity—1150 MW—was therefore allocated to projects to be built along motorways or railway lines.

The second-largest group comprised projects on lower-quality farmland or grassland, which is not particularly suitable for agricultural use. These amounted to 874 MW in total. Around 30 projects with a capacity of 200 MW belonged to the so-called special installations category, where the land is also used for other purposes, such as growing crops.