EU energy auctions yield record low onshore wind prices

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.

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.