Germany & Denmark Launch Cross-Border Solar Electricity Auction

Published on October 13th, 2016 | by

October 13th, 2016 by

Germany’s Federal Network Agency has announced a cross-border auction for ground-mounted photovoltaic installations in cooperation with Denmark.

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As reported by Energy Business Review, this auction will mark the first time Denmark jointly participates in a German auction.

Rainer Baake, State Secretary in the Federal Ministry for Economic Affairs and Energy, said: “With this first cross-border auction in Europe, we are sending an important signal and underline that Germany is ready to work closely together with its European neighbors on promoting renewable energy. “We want to fully evaluate the experience gained in this process with Denmark, and to draw on it in future plans for cooperation with other European partner countries.”

Peter Franke, vice president of the Federal Network Agency, also said: “Since the national auctions have already proved a success, I am confident that the cross-border auctions will prove to be the same.”

Rationale for cross-border auctions

This cross-border auction is based on an agreement signed in July this year between Germany and Denmark on the mutual opening up of auctions for ground-mounted photovoltaic installations operating under the aegis of the Cross-border Renewable Energy Ordinance. Denmark is planning an auction for ground-mounted photovoltaic installations this year in which bids from sites in Germany can also participate.

Since deciding to withdraw from the development of nuclear energy, the incentive for a broad-based expansion into renewable energy industry is a factor, states Global Legal Insights:

“Since nuclear power plants contributed approximately 14.1% of gross electricity production in Germany in 2015, the generation capacity currently provided by nuclear energy will have to be replaced by then.  With public support for new hard coal and lignite plants dwindling, the gap will have to be filled by significantly expanding renewable energies.”

Payments to the installations in both Denmark and Germany will be based on the German Renewable Energy Sources Act, the Cross-border Renewable Energy Ordinance and the provisions of the cooperation agreement.

“The purpose of the law is to facilitate the sustainable development of energy supply, particularly for the sake of protecting the climate and the environment, to reduce the costs of energy supply to the national economy (also by incorporating external long-term effects), to conserve fossil fuels and to promote the further development of technologies for the generation of electricity from renewable energy sources.”

The key point to such a cross-border agreement means the cooperation must be mutually beneficial and have a genuine impact on the energy transition in both countries.

Investors have until 23 November 2016 to submit bids for this auction to the Federal Network Agency. The bids relate to the amount of funding per kilowatt-hour (the “value to be applied”) for an installation. The maximum installation size for this auction round is 10 MW, the maximum bid is 11.09 cents per kilowatt-hour, and the size of the auction is 50 MW. The Federal Network Agency has produced specific formal rules for this auction.

Image via Google Creative Commons


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