RWE boss tells Germany to 'look at the UK' after offshore wind tender flop

The German government should take a look at the UK when considering the reasons for the failure of its own offshore wind auction last week, according to Markus Krebber, CEO of RWE

Krebber also pointed out that the German utility has built up a huge pipeline of projects ready for bidding in the UK's next auction for Contracts of Difference (CfDs).

“We have seen failed auctions now in Denmark, the Netherlands and Germany – all because of the same root cause,” Krebber said at a call on first half earnings.

“These billion-euro investments with lead times of five to seven years need certainty that you have clarity before you take an investment decision and commit to supply chains. You need to know the offtake for the power.

“Against the backdrop of the failed German offshore auction, a look at the UK is worthwhile.”

“The agreed electricity prices will continue to be adjusted for inflation. These are clear and positive signals for the industry.”

Krebber said RWE has always made clear it didn’t believe in the German or Dutch tendering system with the possibility of negative bidding.

“Now we see the proof: the auction failed. I think the continental European governments need to adjust and move to CfDs.”

In the UK, RWE has 7.5GW of offshore wind projects that are eligible for the upcoming auction, Krebber said.

“It doesn't have to be built in its entirety; it can also be built in stages over the next 10 years. But this broad pipeline naturally gives us a lot of flexibility to decide, depending on the conditions, which projects we bid on in the auction and how.”

The utility’s priority, however, is to ensure that the risks are manageable and the projects are profitable, Krebber stressed.

For both RWE and its partners, “investment conditions and returns must be right before construction begins”, he said.