Lacklustre interest in German offshore wind tender a 'warning signal'

The low number of bidders in Germany’s latest offshore wind tender for pre-developed sites is a ‘warning signal’ pointing to an unfavourable spatial design of North Sea areas offered, industry groups said, while also pointing to a need to change the country’s tendering design.

"The fact that only five bids were submitted for the three sites offered at the tender is, in my view, a warning signal. The spatial planning of the offshore wind sites ensures very few full load hours in this area,” said Stefan Thimm, managing director at Germany’s offshore wind energy federation (BWO).

“This robs this technology of its great strength and makes it less attractive for investors."

The three sites awarded Monday are located about 110km north of the island of Borkum, at the sea border to the Netherlands’ economic exclusive zone.

Wake worry

The N-9.1 and N-9.2 sites won by RWE are directly adjacent to the Dutch sea border to the West. That means they will likely face wake effects that cut into the energy output due to nearby planned Dutch offshore wind farms – as winds in the region usually blow from West to East.

Luxcara’s N-9.3 site is located just East of RWE’s sites, so it will be in a relative wind shadow of those.

Germany’s share of the North Sea is relatively narrow when compared to that of its neighbours, so wake effects will become more of an issue as the area gets more crowded with offshore wind farms.

Thimm also lamented that the BNetzA didn’t publish the total proceeds from the tender, diminishing transparency.

“It is important to understand the extent to which offshore wind energy contributes to solving tasks for society as a whole, such as expanding the networks or protecting the marine environment.”

RWE late Monday said it has pledged to pay €250m ($173m) for its two sites, but it isn’t known how high the cash element of Luxcara’s bid was.

About two-thirds of the points awarded in the tender came from the financial component, according to the BWO, while the remaining third came from qualitative criteria such as the decarbonisation of offshore expansion and the use of environmentally friendly foundation technologies.

Thimm suggested that revenue the German state receives from offshore wind tenders should support a further expansion of offshore wind, “for example in the form of urgently needed investments in the expansion and upgrading of German seaports”.

VDMA Power Systems, a group representing wind OEMs, meanwhile demanded that bid payments should be capped immediately in order to contain the “immense pressure on the supply chain and future electricity prices.”

"Non-price criteria must be improved so that they make bids distinguishable without putting a strain on the supply chains,” VDMA Power Systems managing director Dennis Rendschmidt said.

Although it is unknown how much Luxcara pledged to pay, RWE’s payment of only €250m (coupled with the low number of bidders) points to a diminished willingness by developers to churn out large amounts to secure German offshore wind acreage – in any case, if the sites are deemed as less attractive.