The first tender for offshore wind power in Germany ended with a surprising result. The weighted average mean of the price in the auction was 0.44 cent, the lowest bids with 0 cent/kWh and the highest with 6 cent/kWh.

Projekt Meerwind SÜD | OST (WIND MW)
© WindMW GmbH

The results of the first offshore tender from 1st of April 2017 published by the Federal Network Agency (BNetzA) can truly be called astounding. In total four offshore wind parks with a combined capacity of 1490 MW have been successful. The lowest successful bidding prices in the tender were 0 cent/kWh for three projects, while the highest was 6 cent/kWh. This also explains the extreme low weighted average remuneration of 0.44 cent/kWh.

According to Montel, EnBW renounced subsidies for its He Dreiht project (900 MW) and bid into the auction with 0 cent/kWh. According to EnBW the waiver of the subsidy is justified, because future offshore wind farms will be able to refinance themselves completely via the wholesale market for electricity. The three projects of Dong Energy were successful with their bids for the remainder of 590 MW of capacity.

Another reason for the low prices in the tender (with a maximum permissible bidding price of 12 cent /kWh), is the delayed construction of the projects from 2021 to 2025. Until that point, the operators and project developers apparently also expect falling prices for components and construction of the wind parks and increasing wholesale prices. Just recently Vattenfall raised attention with its 4.99 cent/kWh bidding price of its Danish offshore wind farm Kriegers Flak. Still, market expert did not expect such a pronounced drop in the German auction, but estimated a price level of 8 to 9 cent/kWh (Source: Montel).