Wind

Vestas sees Merz government on pro-renewables course but warns against negative bidding

Huge amount reserved for climate action in infrastructure fund 'gives confidence' new German government will continue strongly with deployment of renewables, Nils de Baar tells Recharge

Vestas Central and Northern Europe CEO Nils de Baar
Vestas Central and Northern Europe CEO Nils de BaarPhoto: Bjørg de Meza / Vestas
European Editor, Recharge
By setting aside €100bn for fighting climate change, the incoming German government under likely new Chancellor Friedrich Merz has given Vestas “a lot of confidence” that the new administration will keep on a pro-renewables course, the OEM’s Central and Northern Europe CEO Nils de Baar told Recharge.
Merz’s conservatives from the CDU/CSU and the Social Democrats (SPD) entered a coalition deal last week that included a commitment to Germany’s climate targets and a continued expansion of wind and solar – albeit with less emphasis on clean power than in the outgoing coalition that included the very pro-renewables Greens.

“The German wind energy market keeps growing fast with increased permits and auction volumes,” de Baar said in an interview. “With the coalition contract, it seems like the new government is keen to continue the positive momentum for a secure and sustainable energy system.”

Last month, the conservatives and the SPD had already pushed a constitutional amendment through parliament, allowing the future government to take up debt for a massive €500bn infrastructure fund that would not be counted towards the country’s otherwise strict zero-deficit rule.

The fact that a fifth of that is reserved for climate action “gives us a lot of confidence that also the new government will continue very strongly with the deployment of renewables, both onshore and offshore”, said de Baar.
Under the outgoing government of Chancellor Olaf Scholz with his Green Party climate minister Robert Habeck, Germany had he said taken “a tremendous step forward”, in particular as far as permits for wind farms are concerned.

“Seven gigawatts were permitted in onshore wind in 2023. And that nearly doubled in 2024. If we can keep that trend, or at least keep it at a high volume, it will be essential for the deployment of onshore wind,” said de Baar.

If the political framework remains as announced in the coalition contract, Vestas believes the German onshore wind market can meet the annual target (set by the outgoing government) of 10GW from 2027.

Avoid negative bidding

But de Baar added that for offshore wind it is “important to avoid negative bidding” in auction rounds.

Germany’s mega offshore wind tenders last year and in 2023 were based on negative bidding, with the auction winners, EnBW, BP and TotalEnergies, pledging to pay several billions euros for the right to build several gigawatts of far-offshore wind farms.
The massive payments for sea leases triggered concerns by the wind industry that negative bidding would increase the pressure on the supply chain and push up future power prices.

“We always bring forward that it's important to avoid negative bidding, which we have unfortunately also seen happening in Germany,” de Baar said.

“Most obviously, if there's negative bidding, there will be pressure on the business case for the full deployment of offshore wind.

“There's very good ways to award offshore wind without ending up with negative bidding.”

Trump tariffs will have no impact on German wind

The Vestas Central and Northern Europe boss also stressed that Germany’s government should now quickly implement the EU’s third Renewable Energy Directive (RED III) into national law.

The current emergency permitting regulation of the EU – which had allowed for granting renewables projects the status of being in the overriding public interest – runs out on 30 June 2025, and it is critically important to get this done to keep the momentum on onshore permitting, says Vestas.

Cybersecurity and national security must include critical energy infrastructure, says the OEM, as stressed in the energy, defence and interior policy chapters of the coalition contract.

De Baar also noted that US President Donald Trump’s recent tariff actions when focusing on the European market don’t have much of an impact.

“In Germany, we have a supply chain which is fully independent from any relation to the US. So, in a direct sense, we don't see any impact coming from the tariffs for the supply we have to Europe and Germany.”

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Published 15 April 2025, 10:30Updated 15 April 2025, 10:30
GermanyEuropeVestasNils de BaarFriedrich Merz