British giants BP and French TotalEnergies have emerged victorious from an unprecedented auction process in Germany for the construction of offshore wind farms, agreeing to pay 12.6 billion euros, the German regulator announced on Wednesday July 12.
This confirms “the attractiveness of investments in offshore wind power in Germany”, which was the largest auction of this type, welcomed the president of the federal network agency, Klaus Müller, in a communicated.
The call for tenders concerns three sites in the North Sea and another in the Baltic Sea, for commissioning scheduled for 2030, and a total capacity of 7 gigawatts (GW), at a time when Germany, engaged in a ambitious plan for the development of renewable energies, aims for an offshore wind turbine capacity of 30 GW by 2030. Europe’s leading economy currently has 8 GW of wind power installed offshore. In this respect, these concessions represent “a important step towards achieving the target,” according to the German regulator.
BP and TotalEnergies, which will pay 12.6 billion euros, won among eight bidders. “Competition for offshore wind energy is stronger than ever,” said Klaus Müller.
Illustration of this attractiveness: several “zero cent offers” had been received for the four sites, meaning that candidates for operation were ready to take the risk of building the facilities without a State guarantee on a sale price of their production, and therefore even if they cannot derive any income from the electricity produced by the wind farm.
3 million households
To decide between them, a second round of auctions was organized, “uncapped and awarded on the basis of price only”, according to the association WindEurope, which criticized this procedure.
The sums disbursed “mean that the costs will have to be passed on to consumers and to the wind energy supply chain, which is already in difficulty”, regretted the association, which represents the wind industry in Brussels.
On the contrary, the German network agency welcomed the windfall, saying that 90% of the proceeds will be used to reduce electricity costs, with the rest going to marine conservation and sustainable fishing measures.
TotalEnergies, designated recipient of two maritime concessions, one in the North Sea, the other in the Baltic Sea, specified in a press release issued in Paris that “these concessions will have a duration of 25 years extendable to 35 years”.
“These two wind farms will provide a volume of electricity equivalent to the consumption of more than 3 million households”, assures the French group, which “will pay the German Federal State 582 million euros allocated to the conservation of the marine environment and the promotion of environmentally friendly fishing”.
“An annual contribution intended for the operators of the electricity transmission networks in charge of connecting the projects will be paid for 20 years from the commissioning of the sites”, he adds, stressing that “the production generated by these sites will be marketed by TotalEnergies”.
The German government of Chancellor Olaf Scholz has pledged to produce 80% of electricity from renewable energy sources by 2030, while phasing out coal after giving up nuclear power, implying an ambitious timetable to develop wind and solar.