Existing plants once again dominated Germany's biomass auction

Two rounds of auctions to support biomass-fired plants were held in Germany this year, and neither brought any surprises. The second round of the year, like many previous ones, was once again dominated by existing plants, with only a fraction of the awarded capacity going to new power plants. Awarded prices remain very high, comparable to those in previous rounds.

At the beginning of October, Germany held its second biomass auction of the year, in which the Federal Network Agency sought 234 MW of capacity. There was once again very strong interest in the auction, with developers and operators submitting 712 bids for a total capacity of 622 MW. As in previous rounds, however, interest came not so much from new projects as from existing plants. According to the regulator, 591 MW of the submitted bids related to plants already in operation, while just 31 MW came from new plants.

A total of just 10 new projects, with an installed capacity of 14 MW, secured support in the auction. The remaining 220 MW went to plants already in operation. The awarded minimum guaranteed prices ranged from 129.2 to 173.9 EUR/MWh. Their weighted average of 173.3 EUR/MWh was several euros lower than the 178 EUR/MWh recorded in the April round.

The rule giving preferential treatment to projects in southern Germany, which had reserved half of the offered capacity for them in previous rounds, was not applied in the October auction. The measure was intended to help ensure sufficient available capacity in the south of the country, which has lost all its nuclear plants in recent years.

Despite the temporary suspension of this rule, projects in Bavaria (67 MW) dominated the auction, followed by the federal states of Lower Saxony (56 MW), Baden-Württemberg (21 MW) and Mecklenburg-Western Pomerania (21 MW). Overall, plants located south of the River Main accounted for 37% of the capacity awarded in this round.