First dynamic bidding procedure for offshore wind power auctions
Several zero-cent bids for all sites auctioned
Year of issue 2023
Date of issue 2023.06.15
The Bundesnetzagentur has today published the preliminary results of the ongoing offshore wind power auctions. Several zero-cent bids were submitted for all four sites up for auction, making a dynamic bidding procedure necessary.
"The auction results are good news for Germany's energy transition. It is pleasing to see that the companies do not need any funding for developing their offshore wind power. The zero-cent bids make it clear that offshore wind power is economically attractive,"
said Klaus Müller, President of the Bundesnetzagentur. "The dynamic bidding procedure will determine how much the bidders are willing to pay. We are planning to hold an electronic auction for the first time. Most of the proceeds will go towards bringing down electricity costs and so will directly benefit consumers."
Dynamic bidding procedure – lower electricity costs and sustainable marine conservation
The bidding deadline for the auctions for non-centrally pre-investigated sites was 1 June. The Bundesnetzagentur had put up for auction four sites for offshore wind farms in the North Sea and Baltic Sea with a total capacity of 7,000 MW.
Several bids with a value of zero cents per kilowatt hour were submitted for each of the sites by bidders deciding not to request funding. The Offshore Wind Energy Act provides for a dynamic bidding procedure in the event that this happens. The award is then given to the bidder willing to pay the highest amount for a site.
An online dynamic bidding procedure will determine how much the bidders are willing to pay.
A total of 90% of the proceeds will go towards bringing down electricity costs and 5% each towards marine nature conservation and promoting sustainable fishing.
Bidding procedure to be held soon
The aim of the dynamic bidding procedure is to differentiate between bidders in a competitive environment. The successful bidder will be determined in successive bidding rounds with the bid levels increasing. The award will be given to the bidder willing to pay the highest amount for a site.
The four dynamic bidding procedures will be software-based, with several bidding rounds each day. The Bundesnetzagentur intends to conduct the four separate procedures simultaneously, starting soon. It is not possible to say how long the procedures will take or how high the winning bids will be.
The Bundesnetzagentur will announce the successful bids on its website. The Bundesnetzagentur has already published the rules applicable to the bidding procedure at www.bundesnetzagentur.de/BK6-23-002-regeln (in German).
Further information about the auction for offshore wind farms can be found at www.bundesnetzagentur.de/windaufseeausschreibungen23-1 (in German).