Renewable tenders offer greater advantage for large market players - report
pv magazine, Clean Energy Wire
The introduction of photovoltaics (PV) and wind power tenders has mostly benefitted large energy companies and project developers while limiting direct and indirect participation opportunities for smaller players due to the higher risks, Sandra Enkhardt reports in pv magazine, citing a report by Leuphana University of Lüneburg and the Institute for Future Energy Systems (IZES) in Saarbrücken on behalf of Germany's Federal Environment Agency (UBA). Up until the introduction of the revamped Renewable Energy Act in 2017, the expansion of wind energy and photovoltaics had been mainly supported through feed-in tariffs or market premiums. Although the amount was steadily reduced, players were able to estimate the expected remuneration, the UBA notes. The government’s switch to the tendering process has unintentionally limited market diversity, to the advantage of big players, the report found. In the area of large PV plants, the competitive situation appears to have worsened since the start of tenders in terms of significantly increased concentration rates and the massive increase in large companies and project developers, the UBA writes. Smaller players such as citizens' cooperatives are at a disadvantage compared to larger companies due to the higher risks that arise from the tenders and the risk of not being awarded a contract, Enkhardt points out.
The UBA stresses the importance of maintaining open market accessibility for all players, noting that high concentration in the market impedes its functionality. The researchers also found that direct and indirect participation opportunities had decreased with tenders compared to existing plants. Almost 90 percent of successful tendered projects, for example, offered no participation opportunities. The process is therefore failing to achieve a democratisation of the energy supply, according to the report. In its analysis of the wind sector, researchers found no market concentration of large companies. While onshore wind tenders have recently failed to attract large numbers of bidders, interest in PV tenders has been high.
