German wind permits continue to rise ahead of 3 GW August tender

German onshore wind permits have continued to rise ahead of the next 3-GW tender, set to close Aug. 1.

Meanwhile, the government has scrapped plans to allow 5 GW of already-tendered projects to re-enter the auctions, which now offer higher support prices.

Germany's most populous state, North Rhine-Westphalia, is leading the permit issuance rebound with 910 MW consented in the first half of 2023, over a quarter of Germany's total and already more than in all of 2022, the energy ministry in Dusseldorf said July 10.

The state's economy and climate minister Mona Neubaur noted a "trend reversal in the expansion of wind energy" due to her administration's efforts set to lead to significant capacity gains in 2024 and 2025.

Average onshore wind projects in Germany currently take six years from applying for a permit to commissioning with permitting still taking over two years, wind association BWE estimates.

Construction -- from award of contracts in tender to commissioning -- takes an average 27 months, BWE said, calling for further fast-track measures by the government.

In particular, BWE noted bottlenecks in road permits to transport wind turbines, it said July 6.

5 GW option

Meanwhile, BWE criticized the government for scrapping plans to allow some 5 GW of onshore wind projects awarded support contracts in the 2021 and 2022 auctions to retender in upcoming auctions.

The proposal agreed by the federal government in early June was missing from reforms to the EEG law approved by parliament, BWE said.

Rising costs put the as yet unrealized projects that secured 20-year support contracts below Eur60/MWh ($66/MWh) at risk.

The government lifted the maximum bid price for 2023 auctions to Eur73.50/MWh.

Winter output gains

Germany has been struggling for years to overcome hurdles for onshore growth with annual additions needing to reach 10 GW by 2025 to meet the 115 GW target in 2030.

Only 1.5 GW were added in the first six months, according to estimates by think-tank IWRm with total capacity now approaching 60 GW.

Analysts at S&P Global Commodity Insights forecast wind (including offshore) to average 18.8 GW in Q4 2023, up over 80% from a forecast for Q3, according to a July 6 report.

Last year, Q4 onshore wind output fell to the lowest since 2016 amid below average wind supply as well as sluggish growth over recent years.

Nearer term, a blustery start to July saw wind output peak above 36 GW, causing widespread negative hourly prices.

The daily capture price for German onshore wind fell to minus Eur57.03/MWh on July 2, the lowest on record, according to Platts assessments for S&P Global.

Volume-weighted capture prices averaged Eur88.27/MWh in Q2, according to Platts Renewable Energy Price Explorer.

The Platts Pexapark 3Pi index for a standard 10-year onshore wind PPA in Germany has dropped to Eur57.07/MWh by July 10, down Eur12/MWh since the start of the index on Feb. 28.

Analysts at S&P Global estimated break-even levels for a 10-year onshore wind PPA in Germany starting in 2025 just below Eur80/MWh to recover new build costs, operating costs, and financing costs, in a report published July 3.