Another Undersubscribed Solar Auction In Germany

• Bundesnetzagentur has selected 609 MW capacity of ground mounted solar systems for its November 1, 2022 tender
• It received 677 MW bids for 890 MW auction round, making it yet another undersubscribed solar auction round
• Winning bids for this round ranged between €0.0520 per kWh and €0.0590 per kWh
• BSW Solar blames government's plans to skim off profits of renewable energy generators along with cost increases and restrictive tendering and funding terms among reasons for the low interest in auctions of late

Germany's federal network regulator Bundesnetzagentur had another undersubscribed ground mounted solar auction as it awarded 609 MW capacity against 890 MW tendered, which it attributes to increase in tender volume and challenges related to module procurement.

Held on November 1, 2022, the tender received 117 bids representing a combined capacity of 677 MW. The agency eventually awarded 104 bids with 609 MW capacity.

"The main reason for the signing for this round is likely to be the increase in the volume of tenders this year to over 3,000 MW (in 2021, at 1,850 MW, only just over half was tendered)," explained Bundesnetzagentur. "In order to be able to cover such a high volume, a corresponding number of projects have to be developed; according to reports, however, there are difficulties with binding ordering of modules and prices that are difficult to calculate."

The agency listed same reasons for undersubscription of the previous round in June 2022 when 714 MW bids came in for 1.126 GW tender and eventually 696 MW was awarded (see Germany's 1.125 GW PV Auction Undersubscribed).

Largest volume of 307 MW was awarded to projects in Bavaria, followed by 67 MW in Baden-Württemberg and 66 MW in Brandenburg.

Lowest and highest winning tariffs ranged between €0.0520 per kWh and €0.0590 per kWh, with a weighted average of €0.0580 per kWh having gone up from the previous round when it was determined as €0.0551 per kWh.

Next round of tenders for ground mounted solar auction is scheduled for March 1, 2023.

Commenting on the auction results, German solar energy association BSW Solar blames restrictive specifications in the tendering and funding conditions for the low interest generated in the last 2 auctions.

"The German Solar Industry Association (BSW) sees the reason for this in the restrictive specifications in the tendering and funding conditions of the Renewable Energy Sources Act (EEG). Recent cost increases in the financing, construction and operation of solar systems, in particular as a result of inflation, are not reflected in it," it stated.

It added, "In addition to the cost increases, the federal government's plans for comprehensive sales skimming to finance the electricity price brake threaten to act as a brake on investment. The BSW therefore again warned politicians to take appropriate account of the cost increase in the planned market interventions to finance the electricity price brake."

Another lobby group, the German Association of Energy Market Innovators (BNE) commented on Twitter, "The debate about windfall profits is holding back investments. There is a lack of planning security that a solar park awarded in an auction really pays off. The 'electricity price brake' must be corrected in such a way that solar parks can continue to be sufficiently financed via PPAs. New renewable energy plants should be exempted from the  profit cuts. And PPAs from plants that have already been awarded should be put on an equal footing with PPAs outside of funding schemes."