Germany's biomethane auction ends in fiasco, only bid disqualified

Another round of auctions to support biomethane plants has taken place in Germany, but it fared just as poorly as previous rounds. A bid was submitted, but the country’s regulator had to disqualify it. As a result, no new projects have been secured through auctions in several consecutive rounds.

Germany is rapidly expanding renewable energy in the power sector, but the gas sector is lagging behind. There are several ways to decarbonise the sector: alongside biomethane production, these include electrifying heating and producing green hydrogen for industrial or energy purposes.

For biomethane, Germany is seeking to support new projects through an auction system, as it does for other renewable sources. Unlike auctions for solar or wind power plants, however, biomethane auctions in Germany are failing. No successful project has been selected in several consecutive rounds.

No projects were submitted in the two rounds held in 2023, or in this year’s April round. The situation improved slightly in the latest round, held in early September, but it cannot be called a success. One bid was submitted, but the German Federal Network Agency (Bundesnetzagentur) had to disqualify it.

The last time a biomethane project secured support in a German auction was in October 2022. Even then, only two projects, with a combined installed capacity of 3.5 MW, were successful. The regulator did not publish the winning prices because so few projects had been submitted. The maximum price projects could bid was 188.1 EUR/MWh.

The only relatively successful round therefore remains the auction held in December 2021, when 21 projects with a total capacity of 148 MW secured support. The weighted average winning price in that round was 178.4 EUR/MWh.