Interest in latest German wind auction was strong, prices edged down again

At the beginning of May, Germany held the second round of auctions this year to support the construction of onshore wind farms. As in previous rounds, developer interest was strong, with the volume of submitted bids exceeding the auction volume by almost half. Although the awarded prices remain relatively close to the price cap, the slight downward trend seen in previous rounds continues.

Although the pace of wind farm construction in Germany has lagged behind solar in recent years, wind power is crucial to the country’s energy sector. But with developers’ interest reviving and the number of permitted projects growing, the situation is changing significantly.

Last year, Germany managed to reverse the previous trend of a shortage of new projects, which had left its auctions undersubscribed. Since the second half of the year, Germany has been filling its auctions. This has also had a positive impact on the awarded prices, which have been gradually edging down at a very modest pace.

This trend has continued this year, with awarded prices falling in both the first and second rounds. The second round this year offered developers a total of 3443 MW of installed capacity, while the volume of submitted projects reached 4972 MW. The regulator had to exclude 15 bids from the auction, but competition nevertheless remained high. In the end, developers secured support at the auction for 372 projects with an installed capacity of 3447 MW.

Awarded prices ranged from 64.7 to 69.4 EUR/MWh, with a weighted average of 68.3 EUR/MWh. Prices therefore remain relatively close to the price cap of 73.5 EUR/MWh, but edged down slightly again compared with the previous round, when the average was 70 EUR/MWh.

Regionally, projects in North Rhine-Westphalia (1002 MW) performed best, followed by Lower Saxony (960 MW) and Hesse (379 MW). As has traditionally been the case, the windier northern part of Germany once again dominated the auction.