German wind industry loses momentum as onshore wind auction fails to attract investors

Following the announcement that the onshore wind power market in Germany has awarded only 187 megawatt (MW) of new onshore wind capacity against 500 MW that was available in the September auction;

Mohit Prasad, Project Manager at GlobalData, a leading data and analytics company, offers his view:

“The flawed auction design and difficulties in obtaining licenses for turbine construction have discouraged investors, resulting in a lackluster performance of the auction mechanism.

“Construction of around 2,000 turbines with a combined capacity of 11 gigawatts (GW) is currently on hold on account of licensing issues. These are mainly around mandatory minimum distance from the residential areas and aviation infrastructure.

“According to GlobalData, Germany is expected to have onshore wind installations of 54.6 GW at the end of 2019, an increase of 1.9 GW of net annual installations over 2018, considerably less than the 4 GW average in 2014 and 2015 on the back of feed-in-tariffs. Following the switch to competitive auctions in 2017, the country has witnessed a fall in its net annual installations. As per GlobalData, the country reported annual installations of 2.2 GW in 2018 and is expected to witness a further decline in its 2019 annual installations.

“With the last nuclear power plant to be shut down in 2022 and the coal power plants to be phased out by 2038, the country is aiming to achieve 65% of its power from wind, solar and other renewable energy sources by 2030. According to GlobalData, the onshore wind industry contributed around 25% to the country’s power mix in 2018 and this could increase to around 30% by 2030. The country has set a target to be carbon neutral by 2050 which can be achieved by promoting wind and solar technologies. In order to achieve the climate target, the country needs an average of 4.7 GW of new onshore wind power capacity added each year from now until 2050. This can be addressed by making amendments to the existing auction mechanism and project licensing for onshore wind projects.”

More Media