EnBW gains approval for first German offshore wind auction for the 900 megawatt “He Dreiht” offshore wind farm

EnBW Energie Baden-Württemberg AG has been successful against a field of renowned bidders in the first offshore auction in Germany with the acceptance of its bid for the “He Dreiht” wind farm. The EnBW bid for the construction of the 900 megawatt project did not include EEG subsidies. Following the acceptance of the bid today, the path is now clear for one of the largest offshore projects planned in Europe.

“We are extremely pleased with this result. EnBW is today already one of the leading developers and operators of offshore wind farms in Germany. We currently already operate two offshore wind farms with a capacity of around 336 megawatts and plan to realise two further wind farms with around 610 megawatts of generation capacity by 2019 – marking an important step in the implementation of our EnBW 2020 strategy. As announced at our press conference for the annual report in March, we will also push forward the expansion of renewable energies as a strategic focus of our company in the period beyond 2020. We have laid the foundations for sustainable growth in the period beyond 2020 by gaining approval for He Dreiht ”, emphasised EnBW CEO Frank Mastiaux. “Our bid demonstrates that integrating offshore technology into the market by the middle of the next decade is possible and that offshore wind energy can make a significant contribution towards Germany meeting its energy and climate policy targets. Following on from very good energy yields, offshore technology has also made a quantum leap in terms of efficiency to now qualify as a true driver of the German Energiewende. He Dreiht thus demonstrates our clear commitment to the further responsible and cost-efficient expansion of offshore wind energy and symbolises our contribution to the Energiewende”, continued Mastiaux.

Largest single project in the competitive auction with clear synergy and scaling effects

From a cost and efficiency perspective, He Dreiht offers a combination of benefits unique in Germany: The wind farm is scheduled to be commissioned in 2025 and will benefit from rapidly advancing technological developments and the further professionalisation of the wind energy sector. As by far the largest single project in the competitive auction, He Dreiht is also based on excellent foundations for the highly efficient realisation of the project. Important synergy and thus cost-saving effects also arise due to its proximity to the two EnBW wind farms in the North Sea: around 1,500 megawatts of capacity can be realised and operated in close proximity with Hohe See, Albatros and He Dreiht. In combination, these factors ensure that EnBW He Dreiht will offer particularly low electricity generation costs and can be realised and operated without EEG subsidies.

The German auction system for offshore wind up to 2025 is unique

The first competitive auctions for the construction of offshore wind farms with 1,550 megawatts of capacity as part of the new German Renewable Energies Act (EEG) 2017 and the Offshore Wind Act (WindSeeG) had a number of special features. The auction process saw various projects of differing sizes – which would only be connected up to the grid in four to eight years’ time (2021 to 2025) – competing against each other. He Dreiht is due to be connected up to the grid in 2025 and can thus also not be realised until this point in time. Therefore, it was possible to take into account the expected technological developments over the next few years in the bid submitted for EnBW He Dreiht.

“Our plans were based on comprehensive market analyses and intensive discussions with the supplier industry, which is working on numerous new technological developments and is fully focussed on achieving cost efficient solutions. The assumptions regarding electricity prices that were used as the basis for our bid were thus set at a moderate level. The anticipated returns are considerably above our capital costs and thus remain attractive”, according to Dirk Güsewell, the manager responsible for the expansion of renewable energies at EnBW.

This confirms the cost trends for offshore wind projects seen in the latest invitations to tender in Denmark and Holland. The initial financing provided by funding schemes such as the EEG is bearing fruit and needs to be developed further with the necessary level of care in the coming years so that the continued integration of offshore wind energy into the market proves successful.

“We have set a clear signal for the direction in which offshore technology is headed with our successful bid. Offshore wind farms are power plants at sea that can be refinanced in future on the electricity market and thus even without funding and additional economic costs can also make an important contribution to the Energiewende and the security of supply in an energy system based on renewable energies. The results of the auction are the best advertising for this concept. The reduction in the expansion targets for offshore wind, as agreed in the recent past in Germany, should thus be urgently reviewed”, insists Dirk Güsewell.