Tenders (Sliding feed-in premium)
Updated: 11.01.2019
Author: Tim Sternkopf
While in 2014 a first pilot-tender has been organized for ground mounted solar projects, this procedure has been expanded in 2017 on further technologies. RES projects must take part in a tender process for determining the amount of the sliding premium they are entitled to receive over the period of 20 years from the commissioning of the plant in case the bids turn out to be the most profitable for that running session. The bidding procedure is ‘pay as bid’.
Eligible technologies and support requirements
The tender procedure for renewable electricity capacities in Germany serves to establish a sliding feed-in premium to be awarded to the auction winners. Eligible technologies are new wind onshore, wind offshore, solar and, in case of biomass, both new and existing plants (§ 22 par. 4 EEG 2017). The tender procedure is technology-specific with separate tenders for each technology (§ 36 - § 39 EEG 2017). Nevertheless, there is also a special tender for wind and solar together (§ 39i EEG 2017), which is further regulated in the GemAV. Other tenders include the ones for innovation projects (§ 39j EEG 2017).
Additionally, the EEG 2017 opens also the possibility of organising joint solar tenders with partner countries. Apart from a single tender process with the Kingdom of Denmark in 2016, no such tender has been conducted with other neighbouring countries as of 2018. The conditions for the joint tenders are formulated in § 5 par. 3 EEG. Further provisions therefore are set by the GEEV.
| Solar energy | Eligible. - Eligible for sliding FiP
- Eligible project must be bigger than 750 kW (§ 22 par. 3 EEG 2017)
- One bid for ground-mounted project cannot surpass the installed capacity of 10 MW (§ 37 par. 3 EEG 2017)
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| Wind energy | - Eligible for sliding FiP
- Eligible project must be bigger than 750 kW, pilot project smaller than 125 MW (§22 par 2 EEG 2017)
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| Biogas | Eligible. Including existing plants. - Eligible for sliding FiP
- The support duration is 20 years for new plants and 10 years for existing ones
- Eligible new project must be bigger than 150 kW (§ 22 par. 4 EEG 2017), no size restriction is in place for existing plants referred to in § 39f EEG 2017
- Existing plants must have a payment claim from the EEG for a maximum of 8 years (§ 39f par. 1 EEG 2017)
- One bid for a new project cannot surpass the capacity of 20 MW (§ 39 par. 4 EEG 2017)
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| Biomass | Eligible. Including existent plants. - Eligible for sliding FiP
- The support duration is 20 years for new plants and 10 years for existing ones
- Eligible new project must be bigger than 150 kW (§ 22 par. 3 EEG 2017), no size restriction is in place for existing plants referred to in § 39f EEG 2017
- One bid for a new project cannot surpass the installed capacity of 20 MW (§ 39 par. 4 EEG 2017)
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Tender characteristics
| Pre-qualification criteria | Depending on the technology there are varying pre-qualification criteria to be fulfilled by the bidders additionally to the general conditions of the bidding processes stipulated under § 30 EEG 2017: - The plants for which a bid is submitted must have received a permit issued by the Federal Emissions Protection Act no later than three weeks before the bidding deadline (§36 par. 1 no. 1 EEG 2017)
- Additionally, the plants must be also listed in the register no later than three weeks before the bidding deadline (§36 par. 1 no. 2 EEG 2017)
- A security deposit is required; the value is established by multiplying the EUR 30/kW with the capacity to be installed it is being bid for (§36a EEG 2017)
- Bidders need to pay a participation fee of EUR 522 to be eligible to bid
- This preconditions vary further for community-owned projects (§ 36g EEG 2017)
- The security deposit for offshore wind projects is EUR 100 for each kW to be installed (§ 32 WindSeeG)
- The bids must contain specifics of the building or land the installation is going to be built on (§ 37 par 1-2 EEG 2017)
- A security deposit is required; the value is established by multiplying the EUR 50/kW with the capacity to be installed it is being bid for (§37a EEG 2017); the security deposit can be submitted in a two-steps process (§ 37a EEG 2017)
- Bidders need to pay a participation fee of EUR 586 to be eligible to bid
- The plants for which a bid is submitted must have received a permit issued by the Federal Emissions Protection Act or other competent authorities deciding upon the right of building the plant no later than three weeks before the bidding deadline (§39 par. 1 no. 2 EEG 2017)
- Additionally, the plants must be also listed in the register no later than three weeks before the bidding deadline (§39 par. 1 no. 3 EEG 2017)
- A security deposit is required; the value is established by multiplying the EUR 60/kW with the capacity to be installed it is being bid for (§39a EEG 2017)
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| Bidding procedure | The Federal Network Agency can set the format requirements for the bidding processes. The format is thus not specified by law (§ 30a EEG 2017). Until now, the bidding procedure was been a sealed bid format. |
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| Tender constraints | In Germany, there is no budget cap, only a price and volume cap for tenders. - For 2017: € ct. 7,00/kWh (§ 36b par. 1 EEG 2017)
- Beginning with 2018, the price cap is calculated with regard to the value of the winning bids of the year 2017 (§ 36b par. 2 EEG 2017) and set to EUR ct 6.3 per kWh by the Federal Regulatory Authority
- For 2017: € ct 12/kWh (§ 33 WindSeeG)
- For 2018: the lowest winning bid of 2017 (§ 22 par. 1 WindSeeG)
- Since 2018, the price cap for solar PV is adjusted on a monthly base depending inter alia on the actual realisation rate of solar PV projects (§ 37b par. 2 EEG 2017) and was EUR ct 8.75 in the tender from October 2018.
- Beginning with 2018, the price cap is calculated with regard to the value of the winning bids of the year 2017 (§ 39b par. 2 EEG 2017) and was EUR ct 14.73 per kWh in the tender from September 2018.
- For 2017, the price cap was EUR ct 16,9/kWh (§ 39f par. 5 no 3 EEG 2017).
- Beginning with 2018, the price cap will be calculated with regard to the value of the winning bids of the year 2017 (§ 39b par. 2 EEG 2017) (§ 39f par. 5 no. 3 EEG 2017) and was EUR ct 16.73 per kWh in the tender from September 2018.
Solar and onshore wind combined: - For 2018, the price cap set at EUR ct 8.75 per kWh as they are equal to the ones for solar (§ 12 GemAV).
The volume cap varies according to the bidding session and technology (§ 28 EEG 2017): - Onshore wind:1 February, 1 May, 1 August and 1 October both 2018 and 2019 each 700 MW
- Beginning with 2020: annually on 1 February 1000 MW and on 1 June and 1 October annually 950 MW (§ 28 par. 1 EEG 2017)
- As of October 2018 the Federal Government planned to hold additional special tenders of 1 GW in 2019, 1.4 GW in 2020 and 1.6 GW in 2021 to compensate for planning insecurities resulting from successful citizen bids in the 2017 tenders.
These volumes are subject to adjustments according to §28 par 1a EEG 2017. - 2017 and 2018: 1550 MW each (§27 WindSeeG)
- After 2021 the annual volume caps will be in the range of 700-900 MW (§ 17 WindSeeG)
- 1 February, 1 June and 1 October annually each 200 MW (§28 par. 2 EEG 2017)
These volumes are subject to adjustments according to §28 par. 2a EEG 2017.
As of October 2018, the Federal Government planned to hold additional special tenders of 1 GW in 2019, 1.4 GW in 2020 and 1.6 GW in 2021 to compensate for planning insecurities resulting from successful citizen bids in the 2017 tenders - 2017-2019: 150 MW annually
- 2020-2022: 200 MW annually (§ 28 par. 3 EEG 2017)
These volumes are subject to adjustments according to § 28 par. 3a EEG 2017.
Solar and onshore wind combined: - 2018 – 2020: 1 April and 1 November 200 MW each
Innovation Tenders:
In the Energiesammelgesetz, which still has to be approved by Bundesrat as of December 2018, new innovation tenders are foreseen, which also take system and grid services into account. The tendered capacity is deducted from the tendered capacity of wind and solar. The developed projects will not be able to benefit from a market premium in times of grid congestions and consequent redispatch measures (§ 39j par. 2 EEG). - 2019: 250 MW
- 2020: 400 MW
- 2021: 500 MW
The preliminary amendment can be found under:
https://www.bundestag.de/blob/577896/a1e15fb38f1dd18aa2d39a3e748ff5f1/vorlage-19_5523-data.pdf |
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| Pricing rules | The format for all tenders is Pay as bid. For energy communities (Bürgerenergiegesellschaften) for wind power projects, the pay as clear system applies (§ 36g par. 5 EEG). |
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| Lead time | The lead time varies according to the different technologies: Onshore wind: 30 months (§ 36e par. 1 EEG 2017) and additional 24 months, if project bidders are an energy community (Bürgerenergiegesellschaft) (§ 36g par. 3 EEG). Solar: 24 months (§ 37d par. 2 EEG 2017) Biomass: 24 months (§ 39d par. 1 EEG 2017) |
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| Frequency of tenders | - In 2018 and 2019, four tender rounds are planned annually: 1 February, 1 May, 1 August, and 1 October,
- from 2020 onwards three tender rounds are planned annually: 1 February, 1 June, and 1 October (§ 28 par. 1 EEG 2017)
- one tender in April 2018 (§ 26 par. 1 WIndSeeG); this plants are regarded as existing plants, even though they will be commissioned after the 31 December 2020; nevertheless, these already obtained a series of permits before the 31 December 2016
- beginning with 2021, there is an annual tender planned on 1 September (§17 WindSeeG)
- three tender rounds per year are envisaged (1 February, 1 June and 1 October) (§28 par. 2 EEG 2017)
- one tender round per year is planned (1 September) (§ 28 par. 3 EEG 2017)
Solar and onshore wind combined: - Two tender rounds per year on 1 April and 1 November
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Addressees
A plant operator is entitled to receive a market premium set through auctioning, according to the subsequent provisions of the law (§ 22 EEG 2017) for the amount of energy fed into the grid. The grid operator is required to purchase, transfer and distribute the electricity (§ 11 EEG 2017). A plant operator is one, who, irrespective of the issue of ownership, uses a plant to generate electricity from renewable energy sources (§ 3 no. 2 EEG 2017). Grid operators are the operators of grid systems of all voltages for general electricity supply (§ 3 no. 3 EEG 2017).
Procedure
Process flow and deadlines | The Federal Network Agency is announcing the tender call at earliest eight weeks and at latest five weeks before the bidding deadline. The tender call includes the information on the bidding deadline, volume cap, price cap as well as the specific format of the tender procedure (§29 par. 1 EEG 2017). The Federal Network Agency is the authority responsible for managing the entire tendering procedure from the opening of the bidding process until the completion of the awarded projects (§85 EEG 2017). |
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Competent authority | The competent authorities are the BMWi and the BNetzA. |
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Penalties
| Amount of the fee | The penalties for not implementing the awarded projects or implementing them after the specified deadline depend on the technology: - realised later than 24 months after the announcement of the winning bids are subject to a fine resulting from multiplying the value of the winning bid by 10 Euro per kW (§ 55 par. 1 EEG 2017);
- realised later than 26 months after the announcement of the winning bids are subject to a fine resulting from multiplying the value of the winning bid by 20 Euro per kW (§ 55 par. 1 EEG 2017);
- realised later than 28 months after the announcement of the winning bids are subject to a fine resulting from multiplying the value of the winning bid by 30 Euro per kW (§ 55 par. 1 EEG 2017);
- Special conditions apply to onshore wind projects owned by energy communities (Bürgerenergiegesellschaften). Such projects are subject to a fine resulting from multiplying the value of the winning bid by 10 Euro per KW if the project is realised after 48 months, 20 Euro per KW after 50 months and 30 Euro per KW after 52 months (§ 55 par. 2 EEG 2017).
- The level of the penalty is in relation to the security deposit required for the bidding process (§ 55 par. 3 last sentence EEG 2017).
- realised later than 18 months after the announcement of the winning bids are subject to a fine resulting from multiplying the value of the winning bid by 10 Euro per kW (§ 55 par. 4 EEG 2017);
- realised later than 20 months after the announcement of the winning bids are subject to a fine resulting from multiplying the value of the winning bid by 20 Euro per kW (§ 55 par. 4 EEG 2017);
- realised later than 22 months after the announcement of the winning bids are subject to a fine resulting from multiplying the value of the winning bid by 30 Euro per kW (§ 55 par. 4 EEG 2017);
Existent biomass projects are subject to penalties, if the plant operator delays the submission of the authrisation issued by a environmental expert according to § 39f par 4 EEG 2017, which is required in order to ensure the eligibility of existent biomass projects in participating at the auctions. The penality varies between 20 and 60 EUR/bid kW depending on the delay (§ 55 par. 5 EEG 2017). |
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| Mechanism in place to ensure the payment of the fee | Bidders must provide the Federal Network Agency with a security for their bid before the bid deadline. This security covers the claims of TSOs in case of penalties described under § 55 EEG 2017 (§ 31 EEG 2017). The security varies according to the technology. |
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Distribution of costs
| Consumers | The costs of the tariffs set by the tenders are borne by the final consumers. |
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