POWER: Germany’s No-Bid Offshore Wind Auction Raises Subsidy Question

Germany’s failure to attract any bids in the latest offshore wind auction is raising questions whether the country will follow Denmark’s lead by introducing a CfD subsidy scheme for future offshore wind auctions. 

• Germany’s latest offshore wind auction for the areas N-10.1 and N-10.2 for 2.5GW of capacity with a 1 August deadline received no bids. Germany did not offer any subsidies for the auction.
• Similarly in Denmark, the energy ministry said in December it had not received any bids for the three offshore wind farms (North Sea I A1, A2 and A3) with a combined capacity of 3GW, which caused Denmark to briefly halt all ongoing onshore wind tenders as of the end of January.
• In May, the Danish energy ministry announced to launch a 3GW offshore wind tender in autumn 2025, with the state using a two-sided CfD model, offering up to DKK 27.6bn (€3.7bn) in support and insuring up to DKK 55.2bn.
• In Germany, the wider energy sector has been calling on the government to overhaul the offshore wind auction frameworks to introduce CfDs, even before the no-bid results, amid waning interest.
• Most recently, Germany’s offshore wind lobby group BWO urged the government to change the auction design and to remove bottlenecks such as in port expansion and the modernisation of seaports.
• “The federal government must finally pave the way for a reliable CfD system alongside long-term electricity supply contracts. CfDs lead to a reduction in electricity generation costs of up to 30 percent”, BWO managing director Stefan Thimm said.
• However, Germany’s new coalition agreement does not state any plans for the introduction of subsidies for German offshore wind auctions. Instead, the agreement states that the government plans to enable the hybrid connection via cables and hydrogen pipelines from offshore wind parks as part of the country’s offshore wind law.
• There is a possibility that German will consider the introduction of offshore wind subsidies after the government receives results on its energy market monitoring report that has been commissioned to determine the country’s future power demand as well as the state of the security of supply, grid expansion and renewable expansion.
• German offshore wind capacity stood at 9.2GW at the end of June, with currently 1.9GW under construction, Bnetza data showed.
• Germany targets 30GW of offshore wind capacity by 2030.