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Germany launches 650-MW onshore wind auction

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Essential Energy Insights - February 2021

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Germany launches 650-MW onshore wind auction

Germany's grid regulator launched the second of six onshore wind auctions scheduled for this year, offering up 650 MW of capacity, after the previous two tenders were heavily undersubscribed.

Under the latest round, bids with a maximum price of €62/MWh will be accepted until May 2. The capacity on offer in Germany's so-called grid expansion zone in the northern part of the country will be capped at 144 MW in the tender, the Bundesnetzagentur said. An annual quota of 902 MW for the wind-rich regions is spread across the various auctions.

This year, Germany plans to auction up to 3.8 GW of onshore wind contracts, in which winners receive a sliding premium on top of the wholesale market price.

Interest in the tenders has waned recently, leading prices to tick up compared to the previous two years. In the last round in February, only 476 MW of 700 MW on offer were awarded, although prices declined slightly from the previous undersubscribed tender in October 2018 to between €52.4/MWh and €62/MWh.

Onshore wind additions in Germany declined 55% in 2018 as the switch to auctions has limited growth and permitting bottlenecks have left projects totaling 10 GW stuck in the approval process, according to the country's wind industry association. Total German onshore wind capacity stands at almost 53 GW.

For 2019, industry group BWE forecast less than 2 GW of new capacity ahead of a rebound in 2021, when volumes tendered in 2017 will come online. The government passed a bill to auction off an extra 4 GW through special tenders from 2019 to 2021 to make up for lower additions.