Germany's renewables act revision flatters to deceive

GERMANY: The latest revision of the renewable energy act, expected to take effect in early 2019, will add new auctions to next year's onshore wind calendar, but it is not as good as it looks.

Clouds are gathering around the German wind industry
Clouds are gathering around the German wind industry

Without positive political initiatives on onshore wind planning and permitting issues, the federal coalition government‘s latest renewable energy act update looks like so much hot air.

Additionally, with indications of a new rulebook that combines re-dispatch of conventional power stations with curtailment of onshore wind and other renewables to deal with grid bottlenecks, the federal government has taken a first step towards undermining priority feed-in for renewables, despite it being a requirement of the European Union.

For 2019 — aside from the four regular onshore wind auctions totalling 2,675MW, and two technology-neutral auctions pitting wind and solar against each other for 200MW each — the new law foresees two auctions for "special volumes" of 500MW each, and an "innovation auction" with wind again competing against solar for 250MW but with different rules to the technology-neutral tender.

Although theoretically possible, there are currently no plans for a "cross-border" wind energy auction next year.

A total of 4GW in "special volume" auctions will be spread over three years, according to the new law.

In 2020, the four auctions for 1.4GW will comprise two 300MW lots and two 400MW lots. The "special volumes" foreseen for 2021 will be four 400MW lots, or 1.6GW.

The innovation auctions are also set to rise to 400MW in 2020 and 500MW in 2021.

Their appeal may be diminished, however, by allowing only 80% of bids lodged to win an auction allocation, and eliminating support payments during periods of negative electricity prices, instead of after six hours of negative prices as with the regular and special auctions.

The new law brings new auction volumes for onshore wind, but simultaneously squeezes the overall amounts.

The regular volumes, excluding the special auctions, are set at 2,675MW in 2019, 2.7GW in 2020 and 2.65GW in 2021, followed by 2.9GW in 2022.

But from 2020, any pilot turbine capacity (allowed outside the auction system and likely to amount to around 90MW a year) as well as any onshore wind volumes winning an allocation in a potential cross-border auction, and half the technology-neutral auction volumes regardless of whether won by wind or solar will be subtracted from the regular auction volumes of the following year.

If the regular and "special volume" amounts are not fully allocated in 2019-2021, the unallocated volume each year will be returned to auction three years later, on grounds of trying to maintain competition at auction.

With permitting for onshore wind currently running at just 1.44GW per year and no government plans to swiftly remedy the situation, the onshore wind sector will be hard pressed to meet the auction volumes. 


For the offshore sector, 600MW of offshore converter platform capacity is unused and transmission system operator 50Hertz confirmed an additional 900MW of transmission capacity could be built in the Baltic Sea and accommodated in the onshore networks.

But the German government has ignored its own coalition agreement pledge to activate an additional offshore contribution.

"Without additional auction allocations in 2019, nothing will be built offshore in 2020 and 2021. The situation for the industry is dramatic," warned Andreas Wellbrock, managing director of German offshore wind energy agency WAB.

Work on developing a permitting procedure for offshore projects destined primarily to power electrolysis for hydrogen production, rather than produce electricity that feeds into the onshore transmission network, is to get underway following implementation of the new law but it is expected to take several years and probably not relevant to offshore wind new-builds until after 2025.

Click here for more information about auctions around the world using Windpower Monthly's new Tender Watch table

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