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German Minister warns of risks in offshore auctions after no bids

The German Economy Minister Katharina Reiche warned Wednesday that faulty site selection and changing market dynamics are undermining the offshore wind tenders. This is because Germany's most recent offshore auctions have received no bids.

The Federal Network Agency, BDEW, the utility association, reported that the Federal Network Agency said there were no bids on Wednesday for two August tenders to build offshore wind farms with capacities of 2,000 MW or 500 MW. Commissioning dates are 2031 or 2030.

Reiche stated that the area tendered was more risky due to its geological and geographical conditions. It is located in deep water where erosion of foundations could occur and structural conditions can be very challenging.

The first question to ask is whether the designated areas were appropriate or if potential risks for developers...were underestimated. Reiche said at a Berlin news conference that "we need to examine this critically".

The developer's reluctance was also due to changing market conditions, with customers not willing to continue Power Purchase Agreements in periods of low electricity prices. They prefer to purchase their electricity directly on the market.

She added that the Federal Network Agency must review its bid design and adopt UK-style reforms in order to protect Germany's offshore potential.

The German network regulator did not comment immediately on the results.

BDEW also cited the rising costs of projects and capital due to geopolitical tensions, supply chain bottlenecks and the increasing difficulty in predicting price and volume risks on the electricity market.

The announcements came after a slow start for the sector in 2025, when Germany failed to add a single turbine to the grid. Industry groups also urged the government to improve auction measures to encourage more turbine additions.

According to the consultancy Deutsche WindGuard commissioned by lobbies for data collection, the country's installed offshore capacity was 9.2 gigawatts at the end of 2025, the same as December 31, 2024. However, 1.9 GW are currently under construction. (Reporting and editing by Ed Osmond, Riham Alkousaa)

(source: Reuters)