Germany faces wave of onshore closures

GERMANY: Several gigawatts of wind energy could be closed down after their 20-year support period ends, green energy company trader Naturstrom and environment NGO Deutscher Umwelthilfe (DUH) have warned.

On 31 December 2020, around 6,000 turbines, totalling 4.5GW of capacity, will drop out of the support system

From 2021, several thousand German wind turbines will have exhausted their support period.

If wholesale market electricity prices remain at their current low level, the impact will be dramatic, DUH said.

Gigawatts of wind capacity could be lost, dealing a negative blow to Germany's Energiewende – the transition to ever increasing reliance on renewable energies.

At worst, it could take years to replace the old turbines and restore the German onshore wind fleet size to that of December 2020 and at considerably higher cost, noted DUH head of energy and climate protection, Peter Ahmels.

On 31 December 2020 alone, some 6,000 wind turbines with around 4.5GW of capacity will drop out of the support system, followed by around 1,600 turbines a year to 2026, reported Deutsche Windguard in its analysis for Naturstrom and DUH.

Many wind farm operators must decide now on commissioning a technical analysis on whether the turbines can remain in operation, and must renegotiate service and land lease contracts, said Deutsche WindGuard head of markets and politics, Anna-Kathrin Wallasch.

But at current electricity prices motivation is low.

The analysis showed that although earnings of €0.035/kWh will be sufficient for a significant share of the old turbines to continue operation, most of the turbines will require more than €0.04/kWh to be profitable.

Very few will be able to generate for less than €0.03/kWh, but electricity spot market prices in 2016 averaged just €0.026/kWh.

This is insufficient for any power station, whatever the technology, said Oliver Hummel, on the management board at Naturstrom.

Naturstrom and DUH called for swift closure of old coal and lignite plants in Germany to reduce generation overcapacity and drive up power prices to a level at which the old turbines will be able to operate profitably.