Several companies are applying for sites for wind farms in the North Sea and the Baltic Sea. For the first time, the Federal Network Agency will determine who can work there through an auction. According to her, the companies do not receive government subsidies.
For the first time, the Federal Network Agency will use an auction to decide which companies can build wind farms at sea. This is a report from the Bonn authorities. In the background is the December 31, 2023 tender, marking four offshore wind farm areas in the North Sea and the Baltic Sea. Authorities reported that all four districts received bids of several zero cents. This means that these companies forego state subsidies from the start. This requires a so-called dynamic bidding process.
Authority chairman Klaus Müller called the tender result “good news for Germany’s energy transition”. The good news is that these companies don’t need capital to expand offshore wind. “A bid of zero cents clearly shows that offshore wind is economically attractive,” Müller said.
The highest bidder wins the contract willingness to pay
The area with a total offshore wind turbine output of 7,000 MW is located in the North Sea and the Baltic Sea and has not yet been intensively reviewed. According to the Federal Network Agency, this means that no state conducts preliminary surveys to analyze the marine environment, subsoil and wind, and oceanographic conditions in the advertised area, among other things. Bidders awarded contracts must carry out relevant preliminary investigations before taking responsibility for building wind farms themselves.
The contract is awarded to the bidder with the lowest capital requirements for the registered wind farm. A so-called dynamic bidding process will determine the winning bid for the first time if several bidders drop subsidies for an area and submit bid values of zero cents per kWh. Afterwards, according to the website of the Federal Network Agency at the opening of the tender, the bidder with the highest willingness to pay will be awarded the contract. Bidders’ willingness to pay will now be determined through an online bidding process. An e-auction is now planned “soon”.
Much of the proceeds go to lower electricity costs
“Most of the benefits go directly to consumers through lower electricity costs,” says Müller. This applies to 90% of the funds raised. 5% each goes to marine conservation and promoting environmentally friendly fishing.
Three areas of offshore wind farms (each with a capacity of 2000 MW) are located in the North Sea and one area with a capacity of 1000 MW is located in the Baltic Sea. The North Sea region is located approximately 120 kilometers northwest of the island of Heligoland, and the Baltic Sea region is approximately 25 kilometers from the island of Rügen. Commissioning of the wind farm is scheduled for 2030.
At least 70 GW of electricity should come from offshore wind farms by 2045
In early January, the federal government introduced the “More Wind at Sea” bill. By its own account, this has created the conditions to advance the expansion of offshore wind energy. Increase installed offshore wind capacity to at least 30 GW by 2030 and to at least 70 GW by 2045.
According to consultancy Deutsche Windguard, there were 1,539 offshore wind turbines in operation in Germany by the end of 2022 with a total installed capacity of 8.1 GW.