The new tender design outlined in Germany’s Wind Energy at Sea Act (WindSeeG) poses challenges for the offshore wind sector, according to several trade groups.
A “central weakness” of the amended WinSeeG is the new tender design, stated industry organisations BWE, BWO, Stiftung OFFSHORE-WINDENERGIE, VDMA Power Systems and WAB.
In future auctions project developers will initially have to “put money on the table”, according to the groups, similar to the auctions of mobile phone licenses, in order to build an offshore wind project.
Instead of a surcharge based on the lowest costs, the bidder who pays the highest price for the rights of use of the area is awarded the contract.
According to NERA Economic Consulting, industrial electricity prices could rise by up to €21/MWh due to the newly anchored bid component.
“The cost pressure on the value chain, which is already weakened by the lack of expansion, will also increase – depending on the orientation of the project developers,” said the trade groups.
They stated: “The German government and the offshore wind industry cannot afford fundamental mistakes in the tender design if the first milestone for 2030 is to be achieved.
“The bid component must therefore be deleted as soon as possible or capped as in the Netherlands.
“Sustainability criteria, such as the integration of offshore-produced energy into our power grid, practicable and thus feasible decarbonisation contributions from planned offshore wind energy projects, the economic production of green hydrogen and the strengthening of European industry should be in the foreground.”
The groups have urged for further consultation with the industry and also suggested the introduction of a European standardised approach in order to avoid unnecessary costs.
“The criteria that have now been introduced must be adapted pragmatically and purposefully in cooperation with the industry in order to develop their intended effect.
“Here we see an urgent need for correction in the current WindSeeG,” said the groups.