Companies pay almost €800m for right to build offshore wind farms in German tender

Investors have agreed to pay €784 million $A1.32 billion) for the right to build wind farms in four locations in the North Sea in Germany’s latest offshore wind tender.

The wind farms will have a total capacity of 1,800 megawatts and are expected to enter operation in 2028, the country’s grid agency BNetzA said. Utility RWE already had a right of access to two of the sites it purchased in the auction.

The German energy company was also awarded an additional location, but this could be taken over by Swedish rival bidder Vattenfall, which has an option to exercise an entry right, meaning it can take over the location from RWE under the same conditions.

RWE, whose portfolio already includes six offshore wind farms off German coasts, said the “successful auction with attractive conditions” will significantly strengthen its position. Investor Waterkant Energy won one site with a capacity of 270 megawatts.

Ninety percent of auction proceeds will be spent on reducing general electricity costs and five per cent each on marine nature conservation and the promotion of environmentally friendly fishing.

For the first time, Germany used a bidding process with so-called qualitative criteria, which include the decarbonisation of offshore development.

In July, oil majors BP and TotalEnergies pledged to pay a combined 12.6 billion euros for the right to build wind farms with a total capacity of 7,000 megawatts in the North and Baltic seas in the world’s largest ever offshore wind auction.

Environmentalists hailed the result a “quantum leap” for the technology. The proceeds from the auction were higher mainly because there were no entry rights for these areas, according to a report in newswire dpa.

The cost of constructing new offshore wind farms has fallen markedly in recent years, making the technology one of the most profitable renewable power sources on the market.

Germany plans to greatly increase its offshore capacity in a bid to reach its ambitious renewable power share target of 80 percent by the end of the decade.

First published by Clean Energy Wire. reproduced with permission.