Germany has trimmed next year’s offshore-wind auction to 2.5-5 gigawatts, down from an advertised 6 gigawatts. Lawmakers signed off the cut on Thursday evening. The reversal follows a steep decline in the country’s solar contracts.
Germany boasts more offshore wind than any other European Union member, yet costs keep climbing and future revenues look shaky. Developers hesitate. Berlin is already falling behind its pledge to more than triple offshore-wind capacity by 2030.
In August the malaise became public. A tender for two North Sea sites attracted not a single bid. The zero-subsidy model that once enticed investors now scares them off.
Pressure for a reboot
“Offshore wind is facing a difficult market environment, both internationally and in Germany,” the Economy Ministry said in a statement, citing “tight” supply chains and cost hikes. Industry groups urged a delay to the fourth quarter to craft a safer system. They favour contracts for difference that promise a fixed power price.
Another auction without subsidies “could run empty and cause a standstill in the supply chain,” creating “risks for local value creation and employment,” Stefan Thimm, managing director of offshore-wind group BWO, told Bloomberg. Mr Thimm’s warning landed with unions and suppliers alike.
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The ministry concedes that a “fundamental examination of the framework conditions” is overdue. Yet Berlin rejects a pause. A hold-up would be a “gamble,” erasing any chance of new capacity agreements until the end of the year, according to Social Democrat lawmaker Nina Scheer.
Timetable, not lifeline
Officials will press ahead with the 2026 auctions. Seabed areas go under the hammer on February 1, with follow-ups in June and August. A consultation on redesigning the tenders is open, but tweaks start only in 2027. Federal Minister for Economic Affairs and Energy Katherina Reiche said it would be “beneficial” for the regulator to look at adjusting the tender. Ms Reiche offered no quick fix.
BWO’s frustration is mounting. “The result is a clear signal: the German offshore wind market is currently not interesting for investors,” said Mr Thimm on 6 August. “The current auction design forces developers to bear risks beyond their control without any protection.” His group reminded officials that the Federal Network Agency received no bids at all.
Europe’s wider offshore sector shares the pain. Rising costs have slashed growth prospects, forcing governments to sweeten terms if they want turbines built.
Prices way too low
The contrast with 2023 is stark. Two years ago BP Plc and TotalEnergies SE stumped up billions of euros for German seabed rights, happy to gamble on lofty power prices. Now BP trims its renewable push to focus on fossil-fuel profits, while Total orders a strategic review of its German offshore arm. A June auction had already seen a thinning crowd.
The chill spreads from solar. Investors find unsubsidised parks hard to justify as electricity prices slide. Power-purchase agreements totalled about 250MW in the first half of the year, reckon S&P Global Commodity Insights and Aurora Energy Research. The figure was 1,000MW in the same period of 2024. Germany’s climate maths demand photovoltaic capacity to more than double by 2030; the curve is bending the wrong way.
A fundamental examination of the framework conditions is overdue. — German economy ministry statement
“Solar parks over 20 megawatts that don’t receive subsidies in Germany are hardly being built anymore as the market prices for PPAs are too low,” said Thomas Krings, managing director of Quadra Energy, part of TotalEnergies. Mr Krings’s blunt verdict mirrors the mood among turbine makers, bankers and builders.
Berlin likes to call renewables the backbone of its industrial renewal. Unless it can calm investors’ nerves, the backbone may keep shrinking.
