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The response to the latest round of solar tenders in Germany has been lukewarm, with bids submitted for only 714 MW against 1.126 GW tendered.
As per the Federal Network Agency (Bundesnetzagentur), only 116 bids with a total of 714 MW were submitted in the round with a deadline of June 1 for a tendered volume of 1.126 GW.
This is the first time a tender for ground-mounted solar projects has been undersubscribed. Only 109 bids with a volume of 696 MW were accepted.
Six bids had to be excluded from the procedure due to formal errors. A bid could not be considered because the quota for arable or grassland areas of the named federal state had already been exhausted.
The agency has cited the increase in the tender volume, which at a total of 3.6 GW for 2022 is almost twice as high as the previous year (1.85 GW), as the main reason for the poor response.
The German Federal Network Agency had invited bids for 1.126 GW of solar projects in select states on arable and grassland areas. The ground-mounted solar projects are a part of the three-phased tender totaling 3.6 GW which the agency had announced earlier this year.
The agency added that the increase in module prices and the time taken to complete the projects had created a sense of uncertainty. As a result, larger companies are turning to projects with power purchase agreements outside the Renewable Energy Act (EEG) tenders.
EEG tenders offer guaranteed grid connection, preferential dispatch, and a government-set feed-in tariff for 20 years, dependent on the technology and size of the project.
The tariffs determined in the bids are between €0.0487 (~$0.051)/kWh and €0.0569 (~$0.0594)/kWh. The volume-weighted average tariff in this round is €0.0551 (~$0.0575)/kWh and is higher than the weighted average tariff (€0.0519 (~$0.057)/kWh) discovered in the previous round.
In terms of regions, the largest volume was awarded to projects in Bavaria (399 MW, 64 awards), followed by locations in Schleswig-Holstein (72 MW, six bids) and Lower Saxony (45 MW, seven bids). Broken by category, most of the bids went to projects on arable lands or grasslands, comprising 55 bids with a total capacity of 372 MW, of which 297 MW went to projects in Bavaria (43 bids).
The next round of tenders for solar projects in the first segment is scheduled for November 1, 2022. The European Commission has not yet approved the date, so it is not yet certain whether and under what rules it can be carried out.
In March this year, Bundesnetzagentur had awarded 1,084 MW of solar projects in auctions. Earlier, Bundesnetzagentur had invited bids to develop 1,108 MW of solar projects and 275 MW of biomass systems. Compared to the previous three average bids, the ceiling tariff for the solar tender was increased by 8% to €0.0557 (~$0.062)/kWh.
Rakesh Ranjan is a staff reporter at Mercom India. Prior to joining Mercom, he worked in many roles as a business correspondent, assistant editor, senior content writer, and sub-editor with bcfocus.com, CIOReview/Silicon India, Verbinden Communication, and Bangalore Bias. Rakesh holds a Bachelor’s degree in English from Indira Gandhi National Open University (IGNOU). More articles from Rakesh Ranjan.