Ørsted Goes High and Low in German Offshore Wind Auction

The German Federal Network Agency (Bundesnetzagentur) has awarded Ørsted the right to build an additional 551.75MW offshore wind capacity in the German North Sea.

Ørsted won with the Borkum Riffgrund West 1 with a capacity of 420MW at a price of EUR 0 per MWh, and Gode Wind 4 with a capacity of 131.75MW at a price of EUR 98.30 per MWh, the highest bid accepted in the second round.

In the first German offshore wind auction, which took place in April 2017, Ørsted won three projects with a total capacity of 590MW: the 240MW OWP West at EUR 0 per MWh, the 240MW Borkum Riffgrund West 2 at EUR 0 per MWh, and Gode Wind 3 at EUR 60 per MWh.

This brings Ørsted’s projects in Cluster 1 up to their full 900MW capacity. Ørsted’s Gode Wind 3 and 4 projects will have a total capacity of 241.75MW at a weighted average price of EUR 81 per MWh.

In total, this means that Ørsted will build 1,141.75MW new offshore wind capacity in Germany by 2024/2025, subject to the company taking Final Investment Decisions.

Bid Value-Drivers

The fundamental value-drivers behind Ørsted’s bids are the same as in last year’s German auction, the company said. The value-drivers include larger turbines, superior wind speeds, synergies with adjacent sites, the possibility to extend the operational lifetime of the assets from 25 to 30 years, and the fact that the transmission asset is not part of the construction scope.

In addition to these drivers, a corporate PPA market is developing in Europe, and the company sees corporates considering offshore wind to secure a utility-scale supply of green electricity.

Operating Capacity

With its operational offshore wind farms Gode Wind 1&2 and Borkum Riffgrund 1, Ørsted can currently supply 894MW of offshore wind to the German electricity consumers. Ørsted has another 450MW under construction in Germany at Borkum Riffgrund 2, which is expected to be commissioned in 2019. In total, Ørsted has installed approx. 4.4GW offshore wind capacity across Germany, UK and Denmark and has a further 4.5GW under construction.