Germany Launches the First of Two New Offshore Wind Tenders for 2023

Germany offshore wind tenders
After slowed development, Germany plans to offer 8.8 GW of capacity in new tenders in 2023

Published Feb 1, 2023 7:12 PM by The Maritime Executive

Germany launched the first of two planned new tender packages for offshore wind farm development sites as part of the government’s plans to accelerate the development of renewable energy sources. Germany is already third in the world with approximately 8 GW of installed capacity from wind farms but had slowed development in recent years.

The Federal Network Agency put four areas in the North Sea and Baltic Sea with a total output of 7,000 MW for offshore wind turbines up for tender as of January 31, with bids due by June 1. Three areas for offshore wind farms, each with an output of 2,000 MW, are located in the North Sea, and one area for an output of 1,000 MW is located in the Baltic Sea. The areas in the North Sea are about 75 miles northwest of Heligoland and the area in the Baltic Sea is about 15 miles off the island of Rügen. The wind farms are scheduled to go into operation in 2030.

"The tenders are an important step towards achieving the offshore expansion target of 30 GW by 2030," says Klaus Müller, President of the Federal Network Agency. "The capacity tendered today exceeds the previous annual tender volumes for offshore wind energy many times over."

To accelerate the process and get the areas into development, the agency highlighted that the government has not conducted preliminary investigations of the areas, which, for example, would normally analyze the marine environment, the subsoil, and wind and oceanographic conditions for the areas being offered. Instead, the bidders awarded the contract will be responsible for carrying out the preliminary investigations before the construction of a wind farm.

Germany like other nations in Europe has been working recently to scale back its economic support for the development of wind farms. The country commissioned its first offshore wind in 2010 and moved rapidly to expand the development of renewable energy. However, new projects slowed in recent years with no additional turbines commissioned for Germany in 2021 and only a few in 2022.

Reflecting the view that the industry has matured and can compete without large government support, Germany said the next round of tenders will be awarded to the bidder who registers the lowest need for funding for a wind farm. The process known as dynamic bidding conducts a first round and if multiple bids come in with a bid value of zero cents per kilowatt hour the second phase launches with increasing bid levels in each round till a winner emerges with the highest willingness to pay for the contract.

The proceeds from the dynamic bidding are applied to reducing overall electric costs. Additionally, five percent will be used for marine conservation and another five percent will go to promoting environmentally friendly fishing.

In addition to these four tenders, the Federal Network Agency said it will also launch further tenders for offshore wind energy by March 1, 2023. The second package of tenders will be for areas with a total output of 1,800 MW. Unlike the first set, the ones that will be offered will have already undergone a state-sponsored pre-examination conducted by the Federal Maritime and Hydrographic Agency.