Germany raises offshore wind targets

Market: Electricity
02/11/20

The ruling parties of Germany's coalition government on Monday agreed a new target of 40GW of installed offshore wind for 2040, paving the way for offshore wind to become the "main pillar" of the country's energy transition.

Germany will have 40GW of installed offshore wind in 2040 and 20GW in 2030, according to the agreement between the two groups, chancellor Angela Merkel's right-of-centre CDU/CSU and the Social Democrat SPD. The government draft bill for the country's new offshore wind law merely stipulates a 20GW target for 2030.

The new target will turn offshore wind into the "main pillar" of Germany's energy transition,economic spokesperson of the CDU/CSU faction Joachim Pfeiffer said.

The parties in their agreement also propose to "temporarily forego" the so-called second bidding component.

The ministry's original draft stipulates that second bidding rounds apply in the tenders from 2021, in cases where more than one bidder places a bid at zero. This is to avoid having to determine the winner by lot. In a second bidding round, prospective project developers would bid for an additional price, the so-called "second bidding component", which they would be willing to pay towards the costs of their wind farm's grid connection.

Bids at zero still will be possible, the parties said, and the results of the tenders will be "evaluated", with the option kept open to introduce a second bidding component at a later date.

The ministry's proposal for a second bidding component was heavily criticised by the energy sector as thwarting competition and therefore jeopardising growth in the sector.

Offshore wind association BWO's managing director, Stefan Thimm, welcomed the coalition parties' decision. But he lamented the fact that the parties stopped short of introducing contracts for difference, as demanded by the energy industry.

Economists and energy exchange EEX welcomed the introduction of a second bidding component as a way of bringing offshore wind closer to the market.

Germany now has about 7.75GW of installed wind power, according to the latest data by federal grid regulator Bnetza.

By Chloe Jardine

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