Troubled times

Tuesday, 26 May, 2015 - 15:15
According to recent announcements made by the Federal Network Agency, only clusters 1 to 8 will remain in the German North Sea. (Graphic: BSH)
According to recent announcements made by the Federal Network Agency, only clusters 1 to 8 will remain in the German North Sea. (Graphic: BSH)

Trouble is brewing in the German offshore scene. The ­German Federal Network Agency intends to stop grid connection ­planning in some of the zones. This would essentially be an ­expropriation of sorts for the project developers concerned.

In its capacity as a ­regu­latory authority, the German Federal Network Agency (BNetzA) has informed project developers and operators in a circular letter that capacity allocation for grid access in the German North Sea, in future, will focus on only eight offshore clusters in two zones. Previously, there were plans for 13 clusters in five zones.

Their justification for the change was that projects planned in the two zones would be more than enough to achieve the federal government’s targets, which are capped at 6.5 GW until 2020. For the projects in question to be built, the agency put out a total of 7.7 GW to tender in late 2014, almost all of which has already been awarded, with just 211 MW remaining. In a second step, the agency will have to reduce surplus capacities in order to maintain the cap of 6.5 GW.

“The grid access plans will focus on zones one and two in the North Sea. This applies to wind clusters one to eight, where some 31 projects consisting of about 2,000 turbines have already been approved. Because of the targets set, there is no justification for grid transmission capacities for the remaining clusters,” explains Nico Nolte, who is in charge of Order of the Seas at the German Federal Maritime and Hydrographic Agency (BSH).

Effects of the reduction

Ultimately, this is the result of the current ­administration’s reduced offshore targets. There are two regulatory instruments for access to the grid that is the responsibility of the German transmission grid operators.  First, there is the BSH’s offshore development plan, which broadly defines the corridor for the grid connection cables. The other instrument is the offshore grid development plan that the BNetzA agrees with the TSOs (Transmission System Operators). This plan is the basis for allocating each cluster’s grid access capacities for future wind farms out at sea.

Both plans are still guided by the old objective of 10 GW by 2020, which the project developers in clusters 9 to 13 had also relied on when making their ­decisions to invest a lot of money in developing projects approved by the authorities. ­“Titles that were more or less equivalent to property rights had been awarded to these sites, with several million euros invested in ­development or purchasing. This raises the question of what will ­happen to the investments,” Klaus Meier, President of wpd, notes critically about the BNetzA decision. In case of doubt, the courts will need to resolve any dispute.

The issue is also contentious in another respect, ­because the federal government intends to make an about-turn in regards to tendering models for ­supporting offshore wind farms as from 2017 and will amend the Renewable Energy Act for this purpose. On the one hand, this will be difficult due to the quite strict binding framework for planning. On the other, this would ­significantly limit competition, because there are few players in the market and only 800 MW per year is expected to be put out to tender starting in 2020.

“Especially under these conditions for future bids, our view of the BNetzA’s decision is rather critical, because it leaves no room for competition,” comments Jörg Kuhbier, Chairman of the German Offshore Wind Energy Foundation.

As a result, the industry is drawing up ­recommendations for designing tenders that take the previous approvals into consideration in order to prevent lawsuits from practically expropriated project companies. The industry warns that after the long debates in ­Germany about the support of renewable energy, there is a need to prevent another complete breakdown in ­maritime project business. Their proposed solution is two-fold: first, at least double the capacity of the planned 800 MW to be tendered, and second, consider all previously approved projects in order to put this system change on a legally sound footing.

Based on the current status, the tendering process would affect all projects which have not been approved for grid access capacities by late 2017 or have not been put into operation by 2020. A political decision has yet to be made about the modalities of tendering processes. “Concerns about competition are legitimate and do not yet have a clear solution. To date, there have only been joint workshops to work on this topic; there is not yet any legally safe framework for future project planning,” says Ursula Prall of the law firm Becker Büttner Held and Director of the Offshore Forum Wind Energy.

Torsten Thomas

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