No negative bids allowed in second German auction

GERMANY: After €0/kWh bids at the first offshore wind auction, no negative bids will be allowed at Germany's second offshore wind auction, due on 3 April 2018.

Germany set to hold second offshore auction in April (pic: Iberdrola)

The procedure to procure 1.61GW will select projects with the lowest bids for support.

At the first auction, held in April 2017, three of the four winning projects bid for zero support, far below the predicted value.

As a result, lawmakers reduced the maximum allowed bid to €0.10/kWh, from €0.12/kWh previously, and outlawed negative bidding from participation to prevent bidders simply competing to lodge the lowest bid.

A negative bid would have no impact on the bidder because the German "market premium" method of support would always result in support of zero.

The second German offshore auction gives priority to projects located in the Baltic Sea, with a quota of at least 500MW to be procured.

Only offshore projects that were either fully permitted or had reached an advanced stage of permitting by August 2016, and that will be commissioned between 31 December 2020 and 31 December 2025 will be eligible.

The two auctions, in 2017 and 2018, mark the transition phase to a new German system in which the state selects and pre-develops suitable offshore wind areas and makes the results available to offshore players prior to auctions.