Germany plans to tender 40 GW wind, solar by 2025

London — Germany plans to tender for 40 GW of solar and wind capacity between 2021 and 2025 as it strives to hit a 2030 target of 65% renewables in the power mix, according to an energy ministry draft of the country's new renewable energy law (EEG 2021) seen Sept. 1.

The draft, dated Aug. 25, is being consulted between ministries, with the cabinet set to decide on a final version in late September.

Onshore wind is to continue to play a leading role in the EEG, with 16.7 GW to be auctioned over the five-year period to end-2025, extra support being targeted at projects in southern Germany.

Solar would see 10.7 GW auctioned, of which 2 GW for large roof-top projects, while offshore wind auctions would seek 9 GW with details to be set out in a separate law.

The reform is set to fine-tune details and potentially add new requirements for all new-build houses to have solar.

The numbers are based on assumed 2030 electricity demand little changed at 580 TWh.

The 65% RES target would therefore require 377 TWh of generation from wind, solar etc, with the target potentially requiring adjustment depending on energy savings and new demand from EVs, green hydrogen or electric heating.

In total, the draft targets 100 GW of solar (vs 52 GW installed and 98 GW targeted in last year's 2030 climate law), 71 GW onshore wind (vs 54 GW installed and a 67 GW to 71 GW range in the 2030 climate law).

The government has already boosted its 2030 offshore wind target by 5 GW to 20 GW.

"There are clear risks that Germany will miss its 65% RES target in case of higher penetration of EVs, hydrogen and heat pumps boosting power demand," S&P Global Platts Analytics' Sabrina Kernbichler said, noting that the 580 TWh demand assumption for 2030 is below the five-year average for 2015-2019.

Germany will lose a combined 24 GW of nuclear and coal capacity by 2025 and with that is one of few major European power markets to become structurally shorter over the next five years.

In its latest Five Year Forecast report to be published this month, Platts Analytics estimates average solar growth of 4 GW/year for 2020-2025, with the governments targeting 4.6 GW/year over the period.

For wind, Platts Analytics assumes total capacity of 76 GW by end-2025 vs around 62 GW currently installed.

Reform of the EEG, which 20 years ago kick-started Germany's energy transition, is required to steer wind and solar expansion as well as reform the financing of renewable assets.

The government hopes that wind and solar have entered a post-subsidy era, with competitive auctions producing sliding premium strike prices at or below wholesale market prices.

So far some 15 GW of solar, on- and offshore wind contracts have been auctioned since 2017, resulting in lower premiums compared to fixed feed-in tariffs.

German consumers have shouldered over Eur500 billion ($600 billion) to support over 120 GW of wind and solar capacity through the EEG levy.

The levy, set annually in October, funds the gap between payments to RES operators and income generated from marketing the green power, currently around Eur25 billion, but to be capped from 2021 with income from a new CO2 tax in transport and heating.

German wind, solar tender volumes (in GW) under EEG 2021 draft

Source: BMWi (EEG 2021 draft dated Aug. 25)