01 Mar 2023 | 12:46 UTC

Germany awards 1.4 GW onshore wind at highest price in biggest tender

Highlights

Awarded price up 27% at Eur73.40/MWh

3.2 GW auction again undersubscribed

Total 35 GW up for tender in 2023

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Germany has awarded 20-year sliding premium contracts to 119 onshore wind projects with a combined capacity of 1.44 GW, the second-highest volume ever awarded and at the highest ever price, regulator BNetzA said March 1.

The average awarded price rose 27% year on year to Eur73.40/MWh ($78/MWh) after the government lifted maximum bid prices by a quarter, reflecting inflationary pressures on project costs and rising interest rates.

"Lifting maximum bid values was important, but we need to continue to accelerate permitting and expand areas for development to reach the required expansion volumes," BNetzA President Klaus Mueller said.

The first of four tenders in 2023 for a combined 12.8 GW was again undersubscribed, but awarded volumes rose sharply from the previous three tenders with only the September 2021 tender awarding a slightly higher volume, but at a lower price.

The Platts-Pexapark PPA index for a standard 10-year German onshore wind PPA was pegged at Eur69.41/MWh on Feb. 28, indicating better support from the auction than a merchant approach.

Platts is part of S&P Global Commodity Insights, which is a minority stakeholder in Pexapark.

GERMAN ONSHORE WIND TENDER RESULTS (MW)

Tender Awarded Offered Price (Eur/MWh)
Feb 2023 1,441 3,210 73.40
Dec 2022 189 604 58.70
Sep 2022 772 1,332 58.54
May 2022 931 1,319 58.50
Feb 2022 1,328 1,333 57.60
Annual combined
2022 (4 tenders) 3,220 4,588 58.34
2021 (3 tenders) 3,296 4,235 59.00
2020 (7 tenders) 2,865 3,778 60.98
2019 (6 tenders) 1,854 3,675 61.58
2018 (4 tenders) 2,342 2,710 56.88
2017 (3 tenders) 2,824 2,800 46.03

Source: BNetzA, S&P Global Commodity Insights

Permitting bottlenecks

Lack of permitted projects remains the key bottleneck for the expansion of wind in Germany.

However, sector association WindEurope noted Feb. 28 that Germany had doubled its rate of new onshore wind permits compared to three years ago, while the average permitting time dropped to two years.

Germany has over 58 GW onshore wind installed with annual growth rebounding 25% to 2.4 GW in 2022.

The sector forecasts up to 3.2 GW to be added this year, a level not seen since 2018 when growth halted amid the change from feed-in-tariffs to competitive tenders.

At least 10 GW new permits were required this year to fill the offered auction volume, Germany's BWE association said, noting 2016 saw a similar level.

There has been a focus on unblocking the 8.7 GW of projects currently stuck in permitting for various reasons.

Volume-weighted capture prices for onshore wind averaged Eur162.70/MWh in 2022, more than doubling year on year, according to Deutsche WindGuard.

Daily capture price ranged from a record Eur700.13/MWh on Aug. 26 to minus Eur0.76/MWh on Dec. 31, according to Platts assessments.

The projected rise in wind and solar capacity is set to deflate capture price with onshore wind forecast to capture only Eur40/MWh in 2030, according to a report by analysts at S&P Global.

Editor:

Daniel Lalor