Germany's wind auction attracts record volume of projects, prices remain close to ceiling

Germany’s latest auction for onshore wind farms attracted the highest number of bids in its history. With more than 500 projects and over 6 GW of installed capacity, the auction was fully subscribed. Increased competition compared with previous rounds helped bring awarded prices down slightly, but they remain close to the price ceiling set for these auctions.

Germany held a total of four auction rounds for onshore wind farms this year. The situation in this area is gradually improving after the country was plagued for a long time by a shortage of new projects. Although the auctions were not fully subscribed in either the first or second round, the situation was markedly different in the third and fourth rounds. The third round of the year already saw a record number of investor bids, and developers submitted twice as much capacity in the final round.

In the fourth round, held in early November, Germany’s grid regulator offered more than 4 GW of capacity for auction. In this case, the regulator did not reduce the originally planned volume, given the increase in the number of reported projects with secured permits.

Developers submitted a total of 528 bids for projects with combined installed capacity of 6,083 GW. The volume of projects exceeded the auction volume by half, making this the largest auction in history. According to the regulator, it was the first auction since February 2022 in which the volume of projects submitted exceeded the originally planned auction volume.

Ultimately, 348 projects with a total capacity of 4,098 GW secured support in the auction. Awarded prices ranged from 69,3 to 73,5 EUR/MWh, the ceiling set for this type of auction. The weighted average price was 71,5 EUR/MWh, a drop of just under two euros compared with the previous round. Even very strong competition has therefore failed to push auction prices in Germany significantly lower.

As in the previous round, the largest number of successful projects was in the federal state of North Rhine-Westphalia (1256 MW). Lower Saxony (606 MW) and Mecklenburg-Western Pomerania (429 MW) came next. The country’s windy north continues to dominate wind power auctions.

Planned changes to support may be driving developers’ increased interest

Investors’ increased interest may also be motivated by plans to amend Germany’s renewable energy support mechanism, under which new sources would no longer receive support during periods of negative electricity prices. Different rules currently apply to different sources, depending on the year they entered operation, limiting the support they receive.