Solar power auction in Germany fails to fill increased tender volume

An undersubscribed auction for solar power installations casts doubts on the prospect of a fast buildout of Germany’s renewable power capacity in the short run. In the auction for a total capacity of 1,126 megawatts (MW) held in early June, bids amounting to only 714 MW had been submitted, out of which only 696 MW ultimately were successful, the country’s national grid agency BNetzA said. The main reason for undersubscription, according to the agency, is likely to be the increase of the total tendered capacity this year to 3,600 MW, about twice as much as in 2021. “Also problems regarding the binding order of modules and difficult to calculate prices might have contributed to the restrained bidding behaviour,” the BNetzA said. Most successful bids (399 MW) went to southern German state Bavaria, which already boasts the highest solar power capacity of all states in the country, followed by northern coastal states Mecklenburg-Western Pomerania (72 MW) and Lower Saxony (45 MW). Most successful bids were solar panel installations on agricultural land and on areas in proximity to traffic infrastructure, such as motorways or railroads. Average support amounted to 5.51 cents per kilowatt hour, slightly more than in the previous auction.

Auction volumes for solar and wind power installations had been increased in the context of Germany’s renewed push to reach its climate targets and make progress towards 100 percent renewable electricity by 2035, an aim that has only been strengthened by the need for greater energy independence following Russia’s attack on Ukraine. While wind power auctions have repeatedly been undersubscribed in recent years and only managed to fully auction off planned volumes in the past months, solar power auctions so far usually have been oversubscribed.