Germany’s federal government has outlined plans to replace fixed feed-in tariffs with contracts for difference as part of a new renewables support regime.
A monitoring report published by the economy ministry proposes phasing out guaranteed payments, including ending remuneration during periods of negative prices.
The future model will instead use two-sided CfDs and clawback mechanisms, alongside long-term PPAs and a requirement for new plants to sell power directly on the market.
The report also calls for recalibration of offshore wind capacity and grid connection targets to ensure build-out is aligned with realistic demand projections out to 2045.
Officials said expansion paths for renewables and HVDC infrastructure should avoid overcapacity and be tied to system costs and actual consumption scenarios.
The government added that the reforms aim to keep the energy transition competitive, reliable and affordable while maintaining Germany’s industrial base.
The German Offshore Wind Energy Association (BWO) welcomed Minister Reiche’s analysis and called for the political framework to be aligned to ensure reliable and predictable investments in offshore wind energy.
“Now it’s important to prioritize offshore wind farm revenue targets over pure performance targets. Only if offshore wind farms can be operated efficiently and profitably can they make a stable contribution to security of supply and enable further investments,” said BWO managing director Stefan Thimm.
The monitoring report shows that the efficiency of offshore wind farms can be increased if sites are optimally planned and shadowing effects are reduced, it added.
Increasing full-load hours is a crucial factor for reliably integrating offshore wind into the system – especially during periods of low wind onshore and weaker solar energy production during the winter months. International cooperation, as already announced in the coalition agreement with Denmark and the Netherlands, can help to further exploit existing potential, the BWO stated.
Another crucial factor for the economic viability of offshore wind farms is the auction design, the trade group stated.
The failed tender made it clear that the current system is not sustainable. The Federal Office for Wind Energy (BWO) welcomes the minister’s announcement to introduce contracts for difference (CfDs) and calls for them to be applied for the upcoming auctions in 2026.
“Along with long-term power supply agreements, CfDs are a crucial tool for enabling investments in offshore wind. They can reduce power generation costs by up to 30 percent and are thus the basis for competitive electricity prices,” said Thimm.