The Bundesnetzagentur, Germany’s federal network agency, has revealed the outcomes of the offshore wind power auctions for non-centrally pre-investigated sites. The auctions, which closed for bids on June 1, 2023, employed a dynamic bidding procedure, a first-time implementation of such a process. The total proceeds from the auctions amounted to a staggering €12.6 billion.
Klaus Muller, the President of the Bundesnetzagentur, expressed his satisfaction with the results, stating, “The results confirm the attractiveness of investing in offshore wind energy in Germany. Competition in offshore wind power has never been so high. The results are a key step towards achieving the offshore expansion target of 30 gigawatts by 2030.”
The auction involved four sites with a combined volume of 7,000 megawatts (MW). Three of the sites, located in the North Sea, were designated for offshore wind farms, each with a capacity of 2,000 MW. The remaining site, situated in the Baltic Sea, had a capacity of 1,000 MW. The North Sea sites (N-11.1, N-12.1, N-12.2) are approximately 120 km northwest of Helgoland, while the Baltic Sea site (O-2.2) is roughly 25 km from the island of Rügen. These wind farms are scheduled to become operational by 2030.
The successful bidders and their respective bids were as follows:
bp OFW Management 1 GmbH secured site N-11.1 with a bid of €1.83 million per MW.
North Sea OFW N12-1 GmbH & Co. KG won site N-12.1 with a bid of €1.875 million per MW.
bp OFW Management 3 GmbH claimed site N-12.2 with a bid of €1.56 million per MW.
Baltic Sea OFW O2-2 GmbH & Co. KG emerged as the winner for site O-2.2 with a bid of €2.07 million per MW.
Consequently, the total prices to be paid by these successful bidders are €3.66 billion for N-11.1, €3.75 billion for N-12.1, €3.12 billion for N-12.2, and €2.07 billion for O-2.2.
Rights and Responsibilities:
The bidders who secured the sites are now entitled to a planning approval procedure for the construction and operation of offshore wind installations on their respective sites, along with grid connection and the necessary capacity.
Introduction of Dynamic Bidding Procedures:
The implementation of dynamic bidding procedures was necessitated by the submission of several bids valuing zero cents per kilowatt hour. Eight zero-cent bids were made for each of the North Sea sites, while nine zero-cent bids were submitted for the Baltic Sea site. The objective of the dynamic bidding procedure was to distinguish between bidders in a competitive environment when multiple zero-cent bids were presented. Ultimately, the successful bidders were those willing to offer the highest amount for each site.
These dynamic bidding procedures were conducted online, involving successive bidding rounds with increasing bid levels. Multiple bidding rounds were held each day, with a total of 64 rounds for site N-11.1, 65 rounds for N-12.1, 55 rounds for N-12.2, and 72 rounds for O-2.2.
Allocation of Proceeds:
Out of the total proceeds generated from the offshore wind power auctions, 90 percent will be allocated to lowering electricity costs, while 5 percent each will go towards marine nature conservation and promoting sustainable fishing. The successful bidders are required to pay their contributions for sustainable marine conservation to the federal budget within one year. Contributions aimed at reducing electricity costs will be paid in equal annual installments to the transmission system operators responsible for connecting the offshore wind farms. These payments will span a 20-year period, commencing when the wind farms become operational from 2030 onwards.