The Bundesnetzagentur’s plan to put three German offshore wind areas and 958 MW of potential capacity out to tender has been welcomed, but the timeline for additional capacity has industry representatives concerned
Industry bodies such as the Offshore Wind Industry Association (WAB) say the timing for annual capacity expansion between now and 2030 is "inefficient and illogical" and could further endanger an already hard-pressed supply chain.
With getting on for 2.0 GW of capacity now needing to be tendered every year if 2030 renewable energy targets are to be reached, huge amounts of offshore wind will need to be built in German waters later this decade. But industry bodies such as WAB say additional tenders in the near-term are what is needed – rather than huge amounts of work at the end of the decade – if the supply chain is to be used in the most efficient and sustainable manner.
Approximately 658 MW of the 968 MW of capacity put out to tender in February 2021 is in the North Sea and 300 MW in the Baltic. Under the plan, it should enter into operation in 2026. Bids for the 958 MW of new capacity are due to be submitted by 1 September 2021. Those bids will be capped at a maximum of 7.3 eurocents per kilowatt hour.
Tenders for new offshore windfarms in German waters have not been issued since 2017/2018. The new tenders in the North Sea and Baltic will be the first based on Germany’s newly adopted ‘central model’ in which the grid connection and generating capacity are both included. The areas of the North Sea and Baltic in question were earmarked by the industry for a ‘special contribution’ to help meet renewable energy targets because grid capacities will be available from 2023 onwards.
No new capacity is currently being built in Germany, and the offshore windfarms awarded in tenders in the so-called ‘transitional phase’ 2017/2018 are not due to begin construction until 2022. Between 2023 and 2025, they will increase German offshore wind generating capacity by about 3.1 GW, to 10.8 GW. By 2025, taking into account other offshore windfarms scheduled to be built, the Federal Network Agency will need issue tenders for another 9.7 GW of capacity.
Responding to the February tender and to plans to tender for sufficient capacity to meet the 20 GW by 2030 target, WAB managing director Heike Winkler said the way the timeline on which tenders are organised will make it difficult to meet offshore wind targets and make life difficult for the supply chain to develop in a sustainable manner.
“Between 2026 and 2030 about 9.2 GW will have to be installed if Germany is to reach the 20 GW target,” Ms Winkler told OWJ. “That means the Bundesnetzagentur will need to tender an average of about 1.8 GW per year. But this annual expansion in the volume of offshore wind in German waters will come too late for many German SMEs who urgently need contracts and construction activity.
“Very little additional capacity will be commissioned between now and 2024 but, suddenly, 4 GW will have to be commissioned in one year, in 2030, to meet the target. This doesn’t make sense,” Ms Winkler said.
“Together with other associations, we pointed out in September 2019 that the offshore wind industry was able to implement an additional tender or ‘special contribution’ of up to 2 GW of installed capacity before 2026, helping to alleviate well-known problems with the expansion of renewable energy in Germany and mitigating the ‘thread break’ in the expansion of offshore wind that, sadly, has occurred.”
Ms Winkler said that in the first phase of German offshore wind programmes, up until 2020, about 7.7 GW was installed. As highlighted above, in the transitional phase 3.1 GW will be installed by 2025 and, under the new central model, 9.7 GW needs to be tendered to be able to reach the 2030 goal, with a commissioning peaking in 2029 and 2030. That would mean that if, in 2021, 2022 and 2023, the tenders are approximately the same size the latest one, and less than 1 GW, in 2024 and 2025 more than 6.7 GW will have to be put out to tender.
“It is inefficient and illogical that there should be such an enormous peak of construction activity in 2029 and 2030 after a lengthy dry spell in the first half of the decade,” Ms Winkler told OWJ. “The effect of a prolonged dry spell in construction could be devastating, she said.
“It also means that if the next target after 2030 is to be met – 40 GW by 2040 – another 20 GW will have to be realised between 2030 and 2040. In effect, it means that, from 2025 onwards, over a period of a decade, Germany will have to issue 2 GW of tenders every year, despite the fact that the supply chain has been so badly affected by the lack of recent tenders.
“In our view, an additional near-term tender is essential if targets are to be met and the supply chain is to be able to respond. We therefore need an additional tender in 2022.”