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Germany opens up first PV auction to Danish bidders

Following the success at national level, auctions for PV are now to be opened for the first time to installations outside Germany. Germany has opened an auctioning round to bidders from Denmark.

Back in July, Germany and Denmark signed a cooperation agreement on photovoltaic (PV) installations, which is now being put into practice. On 12 October 2016, the federal regulatory authority, theBundesnetzagentur, published a cross-border auction, which will be held with Denmark, in a European first. Apart from operators of German PV installations, bidders from Denmark will be allowed to take part in the auction for the first time. Denmark is planning to organise a similar auction that will be opened up to bidders from Germany. This will be done before the end of the year. “This cross-border auction shows that Germany is ready and willing to work together closely on renewable energy with its European neighbours,” Rainer Baake, State Secretary at the Federal Ministry for Economic Affairs and Energy, said.

Setting a competitive environment for renewables

The auction can be seen as a pilot project. The lessons that will be learned from it will be analysed and used as basis for launching cooperation projects with other partner countries. Funding rates for renewable electricity will no longer be fixed by government but determined by auction. This is one of the key elements set out by the revised version of the Renewable Energy Sources Act (EEG) published this year. Now, renewables need to show that they can stand the test of competition, not only at national, but also to some extent at European level. From 2017, some 5% of new renewables capacity to be installed each year will be opened up to installations in other European Member States. In order to make this happen, the Federal Cabinet adopted the Cross-border Renewable Energy Ordinance (available only in German) in June. A summary of the key points of this ordinance can be found in the following paper.

Auction details

Investors who own PV installations in Germany or Denmark have until 23 November 2016 to submit bids to the Bundesnetzagentur, for this cross-border auction. The winners of the auction will be determined based on the price of their bids rather than the location of their PV installations. The auction volume is set at 50 megawatts, the maximum capacity per installation at 10 megawatts, and the maximum amount that can be bid at 11.09 euro cents per kilowatt-hour. The cross-border auction is held separate from the next purely national round of auctions, which runs until 1 December 2016. German bidders have the opportunity to participate in both these rounds of auctions. German bidders whose bid has been successful in the cross-border auction are required to withdraw the bid that they have placed in the national auction before the end of the deadline.