Key renewable energy tenders significantly undersubscribed as projects face rising costs

Recent tenders for onshore wind, biomass and biomethane plants in Germany attracted fewer bidders than expected, leaving all three rounds clearly undersubscribed, the Federal Network Agency (BNetzA) announced. The onshore wind tender had a volume of almost 1,320 MW. However, it attracted 87 bids with a bid volume totalling just around 772 MW. The grid agency awarded all the submitted bids. At 5.84 cent per kilowatt-hour (kWh), the average bid value was just below the maximum value and at the level of the previous round of 5.85 ct/kWh. The 286 MW biomass tender received 100 bids for a total of just 101 MW. The 152 MW biomethane tender, meanwhile, received only two bids for 3.5 MW.

The undersubscribed tenders worsen the problem of slow renewables expansion in Germany, said Kerstin Andreae, head of energy industry association BDEW. The reasons why many hundreds of megawatts of approved wind energy projects and a large number of fully developed PV projects did not participate in the past tenders are significant cost increases for wind turbines, photovoltaic modules and grid connection technology, she said. “The pressure on commodity prices as a result of the Russian war of aggression on Ukraine and the significant increase in financing costs due to higher interest rates are having a noticeable impact on the pace of expansion of renewable energies.” Andreae called for higher maximum bid values and shortening the time between the tender date and the announcement of results, because costs rise even in that short time frame.