First German PV Auction: 25 Bids Awarded, 9.17 ct/kWh Average, One Company 40%

In the first German renewable tender aimed at determining financial support for 150 MW of freestanding PV capacity under the Renewable Energy Sources Act (EEG 2014), 25 bids with a total capacity of 156.97 MW were accepted at an average rate of 9.17 ct/kWh (successful bidders receive support in the amount of their bids). This is lower than the maximum of 11.29 ct/kWh allowed for bids, yet higher than the current reference value of 9.02 ct/kWh based on which the market premium for freestanding solar installations under the EEG 2014 has been computed so far. The bottom line is that PV support did not get cheaper but in fact more expensive under the new auctioning scheme.

BNetzA received 170 bids in the first ever tender for financial support of 150 MW of freestanding PV capacity under the EEG. The tender was four times oversubscribed. 37 bids did not fulfill the bidding requirements and were excluded.

The bids were made by a wide variety of participants, BNetzA stressed, pointing out that seven bids were made by individual persons. There were, however, not accepted as the bids were too high. Besides, many small developers were among the bidders, BNetzA said. When the Federal Ministry for Economic Affairs and Energy had presented the Ordinance for Competitive Bidding for Financial Support of Freestanding Installations (FFAV) it had pointed out that it wanted to maintain a wide variety of players under the new auctioning scheme. Interestingly, BNetzA also said that the many of the successful bidders belonged to one company and one company was awarded 40% of the total capacity. This seems to contradict the variety of players, at least the successful ones.

Successful bidders have to make a second security deposit in line with Section 15 FFAV  (a first security deposit had to be made together with the bid, cf. Section 7 FFAV), otherwise the awarded contract will lapse. If security deposits for more than 30 MW will not be made, BNetzA will initiate a replacement procedure (Nachrückverfahren).

Bidders have two years to apply for a certificate of support in the amount of their bids, which requires installation of the PV plants by that time (cf. Section 20 para. 2 sent. 1 in connection with Section 22 para. 1 no. 1 FFAV). It is noteworthy that they will receive financial support as awarded while support for other PV installations declines on a monthly basis (for more information, please see here). Bidders have thus locked in financial support that is higher than financial support currently paid under the EEG 2014 for a period of two years, while the aim of auctioning was actually to make support more cost-effective. For more information on auctioning financial support under the EEG 2014 and a future EEG amendment that will make auctioning financial support for all sources of renewable energies mandatory, please see here.

Source: Federal Network Agency

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