The latest auction which opened on 1 August 2023 awarded 1, 433 MW out of 1,667 MW tendered onshore wind project volume or just over 85% subscription rate, according to auction 

 published by the Federal Network Agency (BNetzA).

BNetzA had reduced the initial auction volume of 3,192 MW by around 48% due to expected low bidding interest - the second time in a row. The regulator was initially planning to auction almost 13 GW in total in 2023 but with only one more auction to go on 1 November 2023 only 7.7 GW have been auctioned of which 4.4 GW have been awarded.

The latter figure is still well above the 3.3 GW awarded in 2022 – a positive sign that the sector is still growing but the pace of growth is not fast enough to achieve the ambitious targets of adding 10 GW of new capacity per year from 2025 onwards and reach 115 GW capacity in 2030.

There is also a big gap between awarded capacity and actual capacity coming online. Germany brought online only 1 GW of 

 between 1 January – 31 May this year (current total 59.2 GW) making the 4 GW target for 2023 unlikely to achieve.

German onshore wind expansion target

North Rhine-Westphalia (457 MW) as well as Lower Saxony (343 MW) and Schleswig-Holstein (259 MW) in the north were again the top three federal states which accounted for 1,059 MW or 63% of the bids awarded in the latest auction. In comparison, only 16.6 MW were approved in Bavaria.

This suggests that the acceleration laws which came into force in summer 2022 alongside the Easter Package have not had the desired effect yet. Each federal state is required to set aside 2% of their territory for onshore wind generation by 2032.

The states that are not able or willing to set aside 2% are allowed to exchange up to 50% of their designated sites with overachieving states. In statistical transfers, they must buy these additional sites within the framework of state contracts.

With supply chains still under stress, components such as transformers now have 

 of two years. This has led to projects going out to tender with delay because investors fear that they would not be able to meet the tender deadlines.

Projects are expected to start commercial operation 24 months after a successful bid is awarded in the auction or face a penalty (extensions are possible in rare cases). 

The award itself expires 30 months after the announcement of the auction results if the project has not come online by then. Only pre-approved projects that have received federal emission control permits issued four weeks before the bidding date are allowed to take part in the auctions. 

Penalty and implementation deadlines should be made more flexible while auction ceiling prices should be communicated early on if the government is to ensure greater success in subsequent auctions, according to wind lobby BWE.

Meanwhile, administrative delays in individual states create further issues. German renewables developer 

 has filed 12 lawsuits against the State Office for Agriculture and the Environment (StALU) in Mecklenburg-Western Pomerania for delaying project approvals.

On 5 September 2023, a high administrative court ruled that StALU’s failure to approve three wind projects which have finished their planning stage in 2018 and 2019 was unlawful. Therefore, the state office is now obliged to issue their approval decision by the end of this year.

According to the onshore wind agency, wind farm permits in Mecklenburg-Western Pomerania take the longest in Germany at 32.8 months. The law reads that authorities would generally have to decide on wind farm applications after a maximum of seven months.

Separately, around a third of the projects currently under development are facing delays with their 

 - a growing issue for new installations.

In the meantime, the German government is mulling 

 for local wind turbine manufacturers to keep production capacity in the country and ensure the 2030 targets are achieved. 

Germany installed 1.9 GW of new onshore wind capacity last year which was 63% of the annual target set in the Easter Package. The target for 2023 was revised fron 5 GW to 4 GW but so far this year only 1 GW has come online. Given the current challenges, Germany will likely miss its 2023 target which may have domino effect on the yearly targets up to 2030.

The installation delays would not have a significant impact on the GO supply given that the projects would be supported and therefore will not receive GOs for their production.

On the other hand, German consumer demand for green electricity is expected to persist. Thus reduced investor interest could lead to a more aggressive GO importing from the AIB or alternatively, boost PPA signing with bundled GOs.

In addition, German energy-intensive and trade-exposed industries would need to cover at least 30 % of their electricity consumption from carbon-free sources in order to qualify for 

The usage of unbudled GOs is considered one of the main options to achieve this goal with sourcing from Central Western European countries (Germany, Austria and Luxemburg) a preferred option.

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A platform with real-time GO data and insights, reporting prices and market fundamentals for Wind, Hydro, Solar, Biomass, Biomethane and RGGOs. 

Our community offers access to webinars, discussions and updates from industry leading experts and analysts. 

Germany’s onshore wind capacity expansion targets (115 GW by 2030) remain under threat as the latest auction round was undersubscribed despite an already reduced auction volume.

While the country has managed to award 4.4 GW of new onshore wind capacity so far this year – up 35% compared to 2022 – supply chain problems and long permitting procedures stretch project implementation timelines.

Undersubscribed auctions and project delays would not impact German GO supply because the country does not assign GOs to subsidised installations. However, the growing German consumer demand for green electricity is expected to persist. 

Therefore, signals for reduced investor interest could trigger a more aggressive GO importing from the AIB or it could spur the market of power purchase agreements (PPAs) as an alternative financin goption.

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News

Interest in German onshore wind auctions remains muted

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