Germany Selects RWE and Luxcara to Develop More Offshore Wind Capacity

 

Germany’s Federal Maritime and Hydrographic Agency (Bundesnetzagentur or BSH) announced the results of its newest round of offshore wind auctions. With the potential to provide 5.5 GW of capacity, the three sites were awarded to Luxcara, an institutional asset money manager, and RWE.

The project sites in the German North Sea near the border with the Netherlands hold significant potential as the could strives to reach a goal of 30 GW and a renewable energy share of 80 percent of the country’s power mix by 2030. The three sites have been pre-investigated with BSH setting a total target of 5.5 GW. The projects represent a nearly two-thirds increase of Germany’s 8.5 GW of capacity in operation. Germany currently has over 1,500 offshore turbines in service having grown from just 35 MW in 2009. Several previously awarded projects are also in the pipeline to increase the operational capacity with a total of a further 8.8 GW designated in 2023.

BSH closed the auctions on August 1 and reports it received a total of five proposals. They were judged on elements such as efforts to reduce decarbonization of the projects and use of environmentally-friendly foundation technologies as well as the price the bidder was willing to pay. BSH said the total price would not be released for confidentiality reasons but highlighted that most of the proceeds go to lowering electricity costs. Successful bidders make small contributions in the first year to marine nature conservation and to promote sustainable fishing, but the bulk of the payments are over 20 years once the wind farm starts operation and goes to the transmission system operators.

RWE however announced it bid a total of €250 million for two sites it was awarded. They are located approximately 70 miles northwest of Borkum island in the German North Sea. Combined they have a potential for 2 GW each with one expected to reach a final investment decision in 2027 and the other in 2028. Construction could begin in 2029 and 2030 with the farms operational in 2031 and 2032. 

RWE will explore the development of the sites with TotalEnergy. They will receive the data developed by BSH to accelerate the planning and decision-making process. The leases have a 25-year term and can be extended to 35 years.

The bids are part of RWE’s strategy to triple its global offshore wind capacity from 3.3 GW to 10 GW by 2030. The company highlights it already operates a total of 19 offshore wind farms, including six off the German coast. It had 1.6 GW of capacity under construction in the Nordseecluster.

Money manager Luxcara was awarded the other site which has a capacity of 1.5 GW. It is located in the German North Sea approximately 50 miles northwest of Helgoland. Luxcara highlights using the data from BSH the project could be developed and connected to the grid possibly as early as 2029.

Luxcara in August 2023 successfully participated in another German offshore wind auction. It won the right to build a 270 MW offshore wind farm located approximately 55 miles from Borkum. Both projects will be part of a portfolio that Luxcara manages on behalf of institutional investors.

The company recently caused a stir in Germany when it announced it selected China’s Mingyang Smart Energy as its preferred turbine supplier. The news was immediately met with opposition that accused China of unfair competition while seeking to block its entry into the German market. The government said it would review the proposal while the EU has said it might slap China with tariffs for unfair pricing and competition in the offshore energy market.