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EU energy auctions yield record low onshore wind prices

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CleanTechnica

Two recent European renewable energy auctions in Germany and Spain have yielded not only significant interest in onshore wind energy, but record low onshore wind prices for Europe.

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Earlier in the month the results of Spain’s renewable energy auction were announced, with wind energy accounting for nearly all of the 3 gigawatts (GW) which was on offer, all of which was offered at the maximum possible discount, meaning that Spanish consumers won’t need to foot the bill. This resulted in contracts being awarded for nearly 3 GW of wind energy for €43 per megawatt-hour (MWh), reportedly the lowest level ever awarded in an onshore wind tender in Europe, according to the European wind energy trade body, WindEurope.

“The tender results show how onshore wind is today the cheapest option for new power generation,” explained Giles Dickson, CEO WindEurope.

“Some may think wind energy no longer needs subsidies. But it was the fact the auction offered a guaranteed minimum income that attracted investors and ensured there were enough bids to deliver the low price. And this is the point — it’s not subsidies but revenue stabilisation mechanisms, addressing the risk of wholesale price volatility, that will be critical to the deployment of onshore wind across Europe at competitive costs. By offering revenue stability, auctions play a crucial role in enabling investors to finance a project — they’re key to making projects happen.”

The Spanish auction awarded 2,979 MW of wind energy, 1 MW for solar PV installations, and 20 MW for other technologies, all of which is expected to be operational before 2020. However, unfortunately, the Spanish solar association, Unión Española Fotovoltaica (UNEF), has claimed that solar was discriminated against in the auction.

Moving north, Germany’s Federal Network Agency, the Bundesnetzagentur, announced the results of the country’s first auction for onshore wind energy, which apparently yielded “a pleasingly high level of competition” and was significantly oversubscribed.

According to the Bundesnetzagentur, the onshore wind energy auction received 256 bids with a volume of 2,137 MW. In the end, 70 bids totaling 807 MW were accepted, at an average of €57.1 MW/h. (The Bundesnetzagentur announced the results in Euro-cents per-kilowatt-hour (KWh), with the average being 5.71 Euro-cents, which can also be written as €0.0571.) The highest bid accepted was for €55.8 MW/h.

The auction was specifically interesting with 70% of all bids being submitted by citizens’ energy companies, receiving 93% of the bids and 96% of the volume awarded.

This article was originally published on CleanTechnica. Reproduced here with permission.  

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  • Peter F

    Interesting that these prices are quite a bit higher than latest Australian wind prices. So we have the opportunity to become an energy super power again. This time with renewables

    • john

      Just have to build a large size cable for several thousand kilometers to the nearest grid.
      The only country we could connect to is Indonesia and that is being looked at especially with the possibility of exploiting the tidal difference on the North West Coast.

    • David leitch

      Capacity factors in Europe, particularly Germany are materially lower than Australia.

      • heinbloed

        Capacity factors are non-relevant for investors.

  • Henry WA

    There appears to be a mistake in the second to last paragraph. If the average bid in Germany was 5.71 euros per MW/h then 5.58 euros per MW/h would seem to be the lowest not the highest bid

  • john

    The article about the objection in Spain by the solar companies.
    https://cleantechnica.com/2017/05/22/spanish-solar-industry-cry-foul-recent-renewable-energy-auction-results/

    Unión Española Fotovoltaica, has announced it is seeking legal action in the wake of what it is calling a “discriminatory” renewable energy auction that prioritized wind energy over solar energy, despite both technologies offering the same bid prices.

    The take home message however is that it seems to me the prices are just a little bit higher than other countries possibly due to higher wage structure and compliance costs.
    Regardless of that defiantly beats the 14c kWH for nuclear.

  • Alastair Leith

    Why is the highest bid in the German auction (€55.8 MW/h) less than the average of all successful bids, €57.1 MW/h?! That would mean all the bids were lower than the average bid.