By Brian Parkin (Bloomberg) — Calls from the industry and utilities including Vattenfall AB for Germany to auction more offshore wind blocs are unlikely to fall on sympathetic ears until voters elect a new parliament.
Germany’s maiden offshore auction, which wrapped up last month with the winners willing to forgo subsidies for the first time, is spurring calls to raise tender caps as developers seek yields through economies of scale. While the calls have garnered backing in the Environment Ministry, the prospects of amending auction limits are zero, lawmaker Bernd Westphal said.
“You can forget lifting the caps before the election in September,” the Social Democrat’s spokesman for energy said in an interview at a wind conference in the port of Bremerhaven. “With power grid expansion delays, this just won’t make sense.”
Utilities Energie Baden-Wuerttemberg AG and Dong Energy A/S in April upended expectations that offshore wind power requires aid. Industry lobbies including the Offshore Wind Foundation are asking why Germany needs offshore auctions at all if utilities are ready to build for free, seeking investment returns in competitive prices for wind power in the open market.
Speaking at the same event, Felix Wuertenberger, head of Vattenfall’s offshore development in Germany and the Netherlands, on Wednesday urged the government to raise auction limits beyond the planned 3 gigawatts in 2017 and 2018 to bring down technology costs.
Developers of North Sea wind projects need to build at least 4 gigawatts of capacity a year from 2020 — equal to one turbine a day — to keep the industry buoyant, said Siemens Gamesa Renewable Energy’s new Chief Executive Officer Markus Tacke at the event.
Some 7 gigawatts a year would be more appropriate to “generate sufficient volume to lower costs and sustain innovation,” said Tacke. Just 1 percent of the sea’s wind power potential is currently under development, according to the company.
The problem in Germany, according to the Social Democrat’s Westphal, is that the country is already struggling to accommodate current rates of green power expansion on its grid. The plan to build three high-voltage power lines to transmit wind and solar power from the north to the south of the country won’t be realized before 2025.
At the same time, Chancellor Angela Merkel’s ruling coalition is divided over steering growth of wind parks in the North Sea, according to the lawmaker.
The Social Democrats, the junior partner in Germany’s ruling coalition, sought higher caps for offshore auctions while Chancellor Angela Merkel’s Christian Democrats sought lower limits on cost grounds and grid concerns, Westphal said.
“Raising the limits on auction volume can’t be ruled out” after September’s election, he said.
© 2017 Bloomberg L.P