RWE and EDF have been awarded three zero-subsidy contracts in Germany’s first offshore wind tender for three years.
The successful developers are due to receive the market price for output from their wind farms, which are due to begin commercial operations in 2026.
Auction regulator the BNetzA had received multiple zero-subsidy bids for two of the three sites in the North and Baltic seas, so picked the winners in a lottery draw.
RWE Renewables Offshore Development was successful with a 225MW project in the North Sea and a 300MW project in the Baltic Sea — having won in the draw against other developers bidding without subsidy — while EDF Offshore Nordsee secured a contract for a 433MW wind farm in the North Sea. The latter’s victory marks EDF’s entry into the German offshore wind market.
The contracts include the rights to grid connection, which will be financed by electricity consumers, and an option of operating the wind farms for 25 years.
However, RWE could lose out on its rights to the two projects if developers already planning projects at the two sites prior to the switch to a centralised tender system choose to acquire the rights on the same terms. This rule is designed as a compensation to developers unsuccessful in Germany’s first two centralised offshore wind tenders in 2017 and 2018, according to law firm Hogan Lovells.
Nordsee Two GmbH (Northland Power 85% and RWE 15%) has the right of entry for the North Sea site won by RWE, while Windanker GmbH (Iberdrola) has the right of entry for the Baltic Sea site won by RWE. They must exercise their right of entry by 2 November.
Iberdrola told Windpower Monthly that it would review whether to exercise its right of entry before making a decision. Windpower Monthly has also contacted RWE for further comment.
“The zero-cent bids show the high level of interest shown by the bidders, despite the comparatively moderate size of the space and the existing entry rights of the former project developers,” said BNetzA president Jochen Homann.
Germany's previous two offshore wind tenders included zero-subsidy bids, though some developers in each were successful in seeking subsidy.
RWE has already helped to develop 930MW of offshore wind capacity operating in German waters, according to Windpower Intelligence, the research and data division of Windpower Monthly.
Stefan Thimm, managing director of the federal association of offshore wind farm operators (BWO), welcomed the results of the latest auction, and said: “With the 2021 tendering round, the expansion of offshore wind energy in Germany is finally picking up speed again. After the long break, this is a very important impetus for the industry.”
However, he described the lottery process for two of the sites as “not a sensible regulatory allocation system”, and called for a contract for difference (CfD) scheme to be put in place.
The BNetZA is due to auction a further 930MW of offshore wind capacity in the North Sea in 2022.