The first time Germany auctioned offshore wind projects, developers were happy to forgo any subsidies, confident the technology was robust enough to turn a profit unaided. Now, they’re not nearly so sure.
Germany’s offshore wind giants now are looking at a U.K. program that would ensure they get paid enough for their power, no matter what wholesale prices are doing.
Potential bidders in Germany’s next round of offshore auctions in 2022 including Orsted A/S and Vattenfall AB are attempting to convince Chancellor Angela Merkel to draft new auction rules to secure income from the giant machines at sea.
They are concerned the government’s muddled climate policy will make investments in the technology riskier and feel they need guarantees to invest billions of euros.
It’s a stark change from the last round of auctions in 2017 when Orsted and EnBW AG won most of Germany’s maiden offshore wind auction by forgoing the crutch of subsidies.
At the time, Merkel hailed the result as a breakthrough in clean power’s competitiveness that might set a precedent.
The government may need to offer the kinds of contracts-for-difference, or CfDs, that the U.K. has used to promote the technology.
Those agreements will lock in the price of power generated by new projects. Winners last year included SSE Plc, Equinor ASA and Innogy SE.
Investors seek an offshore payment regime “that makes economic sense — and that’s clearly the CfD system,” Volker Malmen, Orsted’s German managing director, said by email.
The government is currently evaluating its auction system for offshore wind and has taken note of industry pressure to adopt CfDs, the Economy and Energy Ministry said in an email to Bloomberg on Friday, without being more specific.
Such a system would give necessary financial security while ensuring the continued development of offshore wind to achieve climate targets, he said.
A spokesman for Vattenfall AB, which has won offshore capacity in the Netherlands with zero-bids, said the utility also backs a roll-out of the instruments.
As Merkel gears up moves to cut emissions, policy shifts are becoming more frequent, fanning uncertainty among investors, said Stefan Thimm, managing director of Germany’s BWO offshore industry lobby, which represents some of Europe’s biggest utilities.
Read more at Bloomberg
Gee what a surprise . They need a subsidy . What a shock now that the bird blenders are erected .
When Germany makes mistakes they go big .
Strange the fact that two organiztion created to protect Birds now support Wind and Solar Energy that is a hazard to birds The National Audubon Society and the Royal Society for the Protecting of Birds have allowed Politics to get in the way of what they was created for
Of course they want subsidies. This stuff is simply not economically viable and everybody knows it.
Jul 31, 2019 Green Killing Machines: the impact of renewable energy on wildlife and nature
https://youtu.be/psFkvOpSQc0
The investors want a payment regime that makes economic sense? What about the consumer /ratepayer / taxpayer? Subsidies muddy the picture. Who pays for what becomes opaque. When I pay my Ontario Hydro bill, they tell me that I’ve received ‘support’ , last month the support was more than my payment. I pay for my ‘support’ through my taxes. Guaranteed that I’m paying for other peoples’ support ,too.
I’m also paying for the electricity that charges subsidized EV’s, too.
I can see our future. Energy will be treated like our single payer government health care. Subsidized, substandard, monopolized and rationed.
So now they want subsidies for those Bird and Bat maiming Wind Turbines that ar unreliable and totaly useless? Talk about wasting tax payers money