Solar power auctions in Germany again fail to meet government's ambitious capacity targets

Germany’s latest solar PV auction yet again drew fewer bids than needed to fill the envisioned 890 megawatt (MW) capacity. Federal network agency (BNetzA) said that only 104 projects with a total capacity of 609 MW were successful, following on from other undersubscribed solar auctions earlier this year. The agency sees the increase of the overall tender volume for this year to more than 3,000 megawatt (MW) as the main reason. “In order to be able to cover such a high volume, a correspondingly large number of projects must be developed,” it wrote. “However, there are reportedly difficulties with binding orders for modules and prices that are difficult to forecast.”

The Association of Energy Market Innovators (bne) blamed different factors: The discussion about windfall profit taxes meant investors were reluctant to make decisions. Other hurdles could be dealt with if the right actions were done quickly, said bne: “A lack of land, development plan processes not starting or stagnating, completely distorted costs for grid connections and slow processes for permits and grid connections.” Solar industry association BSW Solar said recent cost increases in the financing, construction and operation of solar plants, particularly as a result of inflation, are not yet reflected in the auction framework.

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. This ambition 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 have usually seen sufficient interest until this year.