Windy northern Germany still dominates wind power auctions, prices are not falling

Germany has held its second auction this year to support the construction of onshore wind farms. Interest in the auctions is growing this year compared with previous years, partly due to the increase in the maximum prices introduced last year. The second auction this year even attracted the largest number of projects since the first auctions in 2017, but it still failed to fill the available capacity. Germany has two more auctions scheduled this year, offering significantly more capacity than the May round.

At the beginning of May, Germany held its second auction this year for onshore wind farms. In the second round, developers could compete for almost 2.8 GW of capacity, as the auction volume was increased because previous auctions were undersubscribed. The volume was slightly reduced in the previous round, however, amid concerns about a shortage of projects.

According to the German network regulator Bundesnetzagentur, 197 projects with a total installed capacity of 2.49 GW were submitted to the auction. The volume of projects submitted was the highest since the 2017 auctions, when it reached almost 3 GW. The regulator had to exclude eight bids from the auction, so developers ultimately secured support for 189 projects with a capacity of 2.38 GW.

Project volumes are growing, but competition is still lacking

"The current round is a record, with almost 2.5 GW of submitted bids, and confirms the trend of growing numbers of bids and permits for projects. If this positive development continues, the targets for developing onshore wind power will be achievable," said Klaus Müller, president of the German regulator.

As is traditionally the case, the winning prices were just below the price ceiling of 73.5 EUR/MWh. Developers secured guaranteed prices of between 72 and 73.5 EUR/MWh for their projects, with a weighted average of 73.3 EUR/MWh. Compared with the previous round, the average price fell by just 10 cents.

As in the vast majority of previous rounds, the country's windy north dominated the auction once again. The largest awarded volumes went to the federal states of North Rhine-Westphalia (727 MW), Lower Saxony (430 MW) and Schleswig-Holstein (318 MW).