As the nation’s most recent offshore auctions failed to draw any bids, Germany’s Economy Minister Katharina Reiche issued a warning on Wednesday that offshore wind tenders were being undermined by poor site selection and changing market conditions. Ambition can sometimes outpace reality during times of transition. In an effort to create a better, more environmentally friendly future, leaders set ambitious goals, markets react, and new plans are created. Sometimes, though, when the curtain rises and the call is made, nobody answers.
Germany’s offshore wind auction fails because developers are put off by the dangers
Germany’s Economy Minister Katharina Reiche warned on Wednesday that flawed site selection and shifting market dynamics were undermining offshore wind tenders, as the country’s latest offshore auctions received no bids. Two August tenders for offshore wind energy plants, with volumes of 2,000 MW and 500 MW, and planned commissioning dates in 2031 and 2030, drew no bids for the first time ever on Wednesday.
Utility association BDEW said, citing the Federal Network Agency. Reiche said the tendered area was riskier due to its geographical and geological conditions, located in deep waters where there could be erosion of foundations and highly challenging structural conditions. Reiche told a news conference in Berlin,
“The first question is: Were the designated areas appropriate, or were potential risks for developers … underestimated? We need to look at this critically.”
The wind industry in Germany faces additional difficulties due to shifting market conditions
She said changing market conditions, with customers no longer willing to uphold Power Purchase Agreements during periods of negative electricity prices and wanting to secure their electricity needs directly from the market instead, was another factor behind developers’ reluctance. The Federal Network Agency should review its tender design and consider UK-style reforms to safeguard Germany’s offshore wind potential, she added.
Germany’s network regulator was not immediately available to comment on the results. BDEW cited rising project and capital costs due to geopolitical tensions and supply chain bottlenecks, as well as increasingly difficult-to-predict price and volume risks in the electricity market, as additional reasons for the results. Explanations on why investors are moving away:
- Long-term energy revenue and price uncertainty.
- Increased construction and funding expenses.
- Absence of guaranteed profits in the absence of subsidies
This might serve as a warning for Germany’s energy objectives and future plans
As a pioneer in renewable energy, Germany has pushed for a swift transition away from nuclear and coal. With goals of tens of gigawatts of capacity by the 2030s, offshore wind was expected to play a significant role in that shift. However, those objectives may need to be postponed or drastically changed if the market is unwilling to participate.
The unsuccessful auction draws attention to a more serious issue: the economic model needs to make sense even when the technology is ready. Businesses require steady returns, and the government must establish a sound framework that promotes investment without placing an undue financial burden on taxpayers. This delicate balance is made much more challenging by growing global pricing and German business sentiment at its highest.
They followed a sluggish start to 2025 for the sector, during which Germany failed to connect a single new turbine to the grid, and industry groups pushed for the government to introduce improved auction measures to ensure more turbine additions. As of June 30, 2025 the country had 9.2 gigawatts (GW) of installed offshore capacity, unchanged from December 31, 2024, but 1.9 GW of new turbines are under construction, according to consultancy Deutsche WindGuard, commissioned by the lobbies to gather data. Furthermore, Germany’s new leader to visit China this year.
GCN.com/Reuters