Financing Model

 "We welcome the decision of the Federal Council to discourage the planned second bid component in the tendering of offshore wind energy and to recommend the introduction of contracts for difference instead.", Commented Stefan Thimm, Managing Director of the Federal Association of Wind Farm Operators Offshore eV, on the result of today's Federal Council meeting. “The decision of the Federal Council is groundbreaking. Right now it has to be about creating stable economic framework conditions and cushioning the consequences of the corona pandemic. Internationally competitive electricity prices are the backbone of our economy. The Federal Council has recognized that contracts for differences are the economically more efficient model here. "

The second bid component proposed by the Federal Ministry of Economics, on the other hand, would result in massive risk premiums and rising electricity prices. The electricity generation costs would be around 30 percent higher than with the difference contract model preferred by the industry. "It would be paradoxical on the one hand to put together a corona aid package in the three-digit billion range and on the other hand to unnecessarily weaken the economy," said Thimm.

The Federal Council rightly decided that a German special route to the tendering system for offshore wind projects was not the right solution. "Our European neighbors have already shown that contracts for differences increase the economic planning of offshore projects and not only contribute to a long-term reduction in electricity production costs, but also make a significant contribution to maintaining the diversity of stakeholders," explains Thimm. "Especially against the background of the Corona crisis, we mustn't forget to take the smaller companies with us."

Yesterday the first reading on the amendment to the WindSeeG took place in the Bundestag. In addition to the introduction of a second bid component in the tendering of offshore wind projects, this also includes increasing the expansion targets to 20 GW by 2030 and 40 GW by 2040, which is very welcome from the industry's point of view. An expert hearing on the change in the law is planned for September.