Study proves: Auction design in the WindSeeG increases industrial electricity prices by up to €21/MWh
Energy economic analysis of the financial bid component according to WindSeeG-E
Germany is facing an unprecedented expansion of its generation capacities in the field of offshore wind energy. With the new expansion targets, around three times as much new capacity will be added by 2030 as is currently on the grid in Germany. In this context, long-term cost-efficient expansion plays a key role.
Two different tendering models are planned to achieve the expansion goals: The Contract for Difference (CfD) model, known from Great Britain, is to be used on pre-examined areas. In addition to the CfD model, tenders for areas that have not been pre-examined are to appear, which are awarded on the basis of a mixture of qualitative (“beauty contest”) and financial (“bid component”) award criteria. These replace the last lottery procedure used. However, the current tender design can lead to an increase in prices for green PPA electricity for industry of up to EUR 21/MWh compared to a model without a financial bidding component, as we show below.
© NERA Economic Consulting
(excerpt from the abstract)
