The effect on costs has been dramatic. Last year saw the remarkable tumble in offshore bids in the Netherlands and Germany. This year we're seeing substantial falls onshore. Bidding for a 1GW tender of new wind projects in Turkey during August started at $70/MWh. It finished — after 30 rounds — at just $34.8/MWh over 12-13 years.
This was a winner-takes-all tender, Turkey's administration committing to the economies of scale provided by one supplier. The consortium led by Siemens Gamesa Renewable Energy (SGRE) emerged victorious from a pack that included most of the industry's biggest players.
The big question now is how SGRE will fulfil this order from its combined portfolio of Siemens and Gamesa turbines. The direction the company takes in Turkey will be a clear pointer to how it will rationalise its product line-up over the next few years.
Competitive tendering is also having a growing effect on turbine design, with Enercon's new EP3 platform providing a good example.
The German manufacturer has built its business on the back of its domestic market's policy of encouraging small-scale citizens' projects supported by feed-in-tariffs. Robust, reliable turbines, built for maximum energy capture were the prime requirements.
Now the emphasis lies squarely on cutting the levelised costs of energy (LCOE), and Enercon is rethinking its approach. The new platform will be built to meet IEC Class standards rather than to exceed them. Features that were included as standard will now become optional extras.
Although Germany is adopting competitive tendering for onshore wind, its system is still designed to favour citizens' projects in order to maintain a diversity of owner-operators and a wide regional spread. That competitive advantage largely squeezed the big developers out of the first tender. But one of them found a way round for the second tender.
The Saxony-based UKA Group formed partnerships with a large number of citizens' project developers, its experience and expertise in the field helping them to lower their bids. The group is involved in more than half the successful bids and has secured itself a 690MW pipeline.
That wasn't the outcome the auction designers had in mind.