Germany's grid agency launched the country's first renewables tenders for 2019, announcing that it will separately solicit bids for up to 700 MW of onshore wind capacity and 175 MW of solar photovoltaic parks until Feb. 1. Wind projects will be capped at €62/MWh and solar projects at €89.1/MWh.
The grid agency said that the maximum volume for the solar auction could change if Germany's renewables expansion law, passed by Parliament earlier this month, enters into force before the tender closes. Under the law, the government will award an additional 4 GW of onshore wind and solar PV capacity each between 2019 and 2021, in part to mitigate an expected shortfall in the country's emissions reduction targets.
Germany's last onshore wind tender of 2018 raised red flags throughout the industry since it only managed to award slightly more than half its tendered capacity. The wind sector is bracing for a market slump, with research group FA Wind recently projecting that additions this year will total less than 3 GW, drop to 2 GW in 2019 and tick up to 2.4 GW in 2020. Those numbers would mark a significant drop from the 5.3 GW added in 2017.
Last year, developers rushed to capture the last feed-in tariffs before a switch to competitive auctions, but slow permit approvals and lawsuits have also increasingly held up wind projects. Industry group BWE says that approximately 10 GW of projects are stuck in the permitting process.
For next year's tenders, winning projects will receive their individual bids, except for wind farms entered by citizen-owned energy cooperatives, which will receive the market clearing price instead.
The capacity of wind projects allowed in the so-called grid expansion area in northern Germany is capped at 155 MW. That part of the country is already highly saturated with onshore and offshore wind farms, straining networks and creating bottlenecks for electricity that is needed further south.
The auctions are the first two of 16 that are planned for the coming year, also including biomass and offshore wind, as well as joint onshore wind and solar tenders. Standalone wind volumes will be tendered in February, May, August and October, for 700 MW each, while standalone solar PV auctions will take place in February, June and October, for 200 MW each. Auction volumes are usually reduced slightly to account for adjustments and overhang from previous rounds.