Pinwheel

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The Federal Network Energy evaluated the first auction pursuant to the 2017 Renewable Energy Sources Act for onshore wind energy. Altogether, 256 bids for projects with a combined volume of 2,137 megawatts were submitted; the actual volume up for auction was for a capacity of 800 megawatts.

State Secretary Rainer Baake said: “The result of the first auction for onshore wind energy is very positive: the lowest bid to be accepted was for 5.25 cents / kWh, the highest was 5.78 cents / kWh. Citizens’ energy initiatives received 93 per cent of all awards. 65 out of 70 projects that were successful in the bidding process had been presented by citizens' energy companies and 5 by other players. The successful projects are located in nine different Länder (states), all across the country. The fact that we have seen this high level of competition which has brought prices down this much and that there has been such broad-based public participation shows that the paradigm shift we have initiated away from fixed funding rates stipulated by government to market-based pricing has worked well".

The auction was two and a half times oversubscribed. Since bids are sorted in ascending order according to their bid prices, this has positive effects on the competition and therefore also on the level of prices.

Two thirds of all bids were submitted by citizens’ energy companies. The expansion of renewables has so far been based on the commitment of a variety of individuals, companies and associations. In particular, citizens' energy initiatives have fostered public acceptance of the expansion of renewables, as many of them are anchored at local level. Mr Baake explained: “We still need them in the next stage of the energy transition. For this reason, the Federal Ministry for Economic Affairs and Energy had devised a strategy to ensure that this type of initiative can survive in the competitive auctioning process."

Citizens' energy companies are given two advantages over other competitors in the process: on the one hand, unlike other players, they can submit bids for a wind farm without the need to obtain a licence beforehand. If they make use of this option, they are given extra time to complete the project. On the other hand, the funding they receive is equal to the highest price that was accepted, not the price for which the bid was originally submitted. These two exceptions have helped lower the risks incurred by the citizens' energy undertakings and have helped maintain a high level of diversity of actors in the development of renewable energy. Citizens’ energy initiatives are required to offer 10 per cent of their shares to the municipality.