The Federal Network Agency of Germany (Bundesnetzagentur) has announced the auction results for 7,000 MW of offshore wind sites located in the North Sea and Baltic Sea.

The lowest price discovered in the auction was €1.56 million (~$1.74 million)/MW. The proceeds from the auction came to around €12.6 billion (~$14.03 billion).

Four sites with a combined volume of 7,000 MW were up for auction. Three sites for offshore wind farms, each with a capacity of 2,000 MW, are located in the North Sea, and one site with a capacity of 1,000 MW is located in the Baltic Sea.

The sites in the North Sea (N-11.1, N-12.1, and N-12.2) are about 120 km northwest of Helgoland, while the site in the Baltic Sea (O-2.2) is around 25 km from the island of Rügen.

The wind farms will become operational by 2030.

The winning companies, BP and TotalEnergies, submitted their bids through their respective special purpose vehicles – bp OFW Management 1 GmbH (BP); bp OFW Management 3 GmbH (BP); North Sea OFW N12-1 GmbH & Co. KG (TotalEnergies) and Baltic Sea OFW O2-2 GmbH & Co. KG (Total Energies).

bp OFW Management 1 GmbH quoted €1.83 million (~$2.04 million)/MW to win the N-11.1 site and bp OFW Management 3 GmbH quoted €1.56 million (~$1.74 million)/MW for site N-12.2.

North Sea OFW N12-1 GmbH & Co. KG quoted €1.875 million (~$2.09 million)/MW for site N-12.1, and Baltic Sea OFW O2-2 GmbH & Co. KG quoted €2.07 million (~$2.31 million)/MW for site O-2.2.

The total amount paid by the bidders amounted to €3.66 billion (~$4.08 billion) for N-11.1, €3.75 billion (~$4.19 billion) for N-12.1, €3.12 billion (~$3.47 billion) for N-12.2, and €2.07 billion (~$2.31 billion) for O-2.2.

Klass Müller, President of the Bundesnetzagentur, said, “The results confirm the attractiveness of investing in offshore wind energy in Germany. Competition in offshore wind power has never been so high. The results are key to achieving the offshore expansion target of 30 GW by 2030.”

A dynamic bidding procedure was conducted for each of the four sites up for auction. It was the first time such a procedure had been carried out.

The auctions required the implementation of dynamic bidding procedures due to the presence of numerous bids valuing zero cents/kWh. Eight zero-cent bids were received for the North Sea sites, while the site in the Baltic Sea received nine such bids.

The purpose of employing dynamic bidding procedures was to distinguish between bidders in a competitive setting, especially when multiple zero-cent bids were made. Ultimately, the successful bidders demonstrated the willingness to pay the highest for each respective site.

There were 64 bidding rounds for N-11.1, 65 for N-12.1, 55 for N-12.2, and 72 for O-2.2.

Of the funds generated through the offshore wind power auctions, 90% will be allocated to reducing electricity expenses, while 5% will be dedicated to marine nature preservation and the promotion of sustainable fishing, respectively.

The winning bidders are obligated to contribute to sustainable marine conservation to the federal budget within a year.

Additionally, the payments for reducing electricity costs are to be made in equal yearly installments to the transmission system operators responsible for connecting the offshore wind farms. This payment plan will span 20 years, commencing from 2030 when the wind farms become operational.

In March this year, Germany’s offshore wind energy auction for 3.21 GW had received interest for only less than half (1.5 GW) of the capacity on offer. The auction had received only 126 bids, while Bundesnetzagentur excluded seven bids due to procedural errors.

Earlier, Bundesnetzagentur had launched a new offshore wind auction to install 1.8 GW of offshore wind power projects in the North Sea, with an expected grid connection date of 2028.