PV auctions in Germany: First results and lessons learnt

PV auctions in Germany

First results and lessons learnt

Dr. Corinna Klessmann

23/06/2016, Intersolar

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© ECOFYS | |

Ecofys work on RES auctions

Supporting the design of RE auction schemes

> Design and evaluation of the German pilot auction for PV (BMWi)

> Design and evaluation of the German auction schemes for wind

onshore and wind offshore (BMWi)

> Offering auctions advice to other governments (EU AURES)

Empirical analysis of international experiences with RES

auctions

> EU AURES, European Commission, IRENA, GIZ, MVV, etc.

23/06/2016 Dr. Corinna Klessmann

© ECOFYS | |

Key features of the German pilot auction for PV


© ECOFYS | |

Key features of the German PV auction

> Auction volume and schedule

– On average 400 MW ground-mounted PV per year

– Future (EEG 2016): 600 MW per year (ground-mounted and large rooftops)

– Three rounds per year

> Eligible installations

– Pilot auction: ground-mounted PV >100 kW up to 10 MW

– Future: all PV >750 kW up to 10 MW (no differentiation like in France)

– Roof-top <750 kW: exemption from auction, feed-in tariff

> Site restrictions

– Conversion sites

– „Margin strips“ along highways and railways

– 10 sites on farmland in „disadvantaged“ areas

> Auction procedure

– Price only (not multi-criteria like in France)

– Static sealed-bid auction

– Changing price rule in pilot scheme, pay-as-bid from 2016 onwards


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Prequalification requirements and penalties

Auction PV DE

Realisation

- Sunk costs- Prohibitive barrier for

(some) bidders

- Bidder risks- Prohibitive barrier for (some)

bidders

+ Selection of projects with sufficient planning progress

+ „serious“ bids

+ Incentive to realize due to penalties

+ „serious“ bids

Prequalification:

early/medium

(“Aufstellungsbeschluss”

or “Bebauungsplan”)

Penalties:

50 or 25 €/kW

If installation not realised after two years

(reduction of tariff after 1.5 years)

Site selection PermittingFinancing /Building


© ECOFYS | |

Zielkonflikte erschweren die Ausgestaltung der Ausschreibung.


Goal Auction design features (intention)

Volume control/Target achievement

- High realisation rate through prequalification requirements and penalties

- Realistic realisation period

Efficiency/Low support costs

- High competition- Low transaction costs- Limitation of bidder risks

Preserving actor diversity

- Simple and transparent design- Non-discriminatory prequalification criteria- Limited bidder risks

Goals of the German PV and renewables auctions

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Market situation for ground-mounted PV installations

> Boom and bust cycle before the auction started in 2015

> Huge untapped project pipeline

> Market actors hoped that auctions would lead to market recovery


0

500

1.000

1.500

2.000

2.500

3.000

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014*

Zubau PV-Freiflächenanlagen in Megawatt

Source: ZSW 2015

Newly installed capacity (ground-mounted PV) in MW

© ECOFYS | |

Results of the first four auction rounds


© ECOFYS | |

Efficiency: the level of support for has decreased by 20%

571

525 532

483

157 160

200

128

9.17

8.498.00

7.41

6.50

7.00

7.50

8.00

8.50

9.00

9.50

10.00

0

100

200

300

400

500

600

Source: Ecofys 2016 based on official results by BNetzA

Support

level in

cent/

kW

h

Volu

me in M

W

Remark: The pricing rule changed from pay-as-bid (1st and 4th round) to uniform pricing (2nd and 3rd round)

Results of German pilot auctionsfor ground mounted PV in 2015 and 2016

Volume of bids (eligable only) Volume awarded EEG (old) Auction results in cent/kWh


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Effectiveness: too early to tell

> The realisation period of the first auction has not yet ended (24 months =

April 2017)

> So far only 10 projects realised, but also no awards returned

> Project developers seem to exploit the full realisation period due to falling

module prices


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Actor diversity: a mixed picture

> Large diversity of actors bidding

> Winning bids: some market concentration, but still variety of actors

– In the first round one bidder managed to secure 43% of the volume

– Over the first four rounds approx. 40 bidders were successfull

– „Bigger players“ (cumulated volume share >5%) secured approx. half of the total

volume

> Type of actors: mostly professional project developers, very few

cooperatives and private persons; links between actors difficult to assess


29%

28%

20%

21%

20%

0%

33%

0 50 100 150 200 250 300

Limited Commercial Partnership (GmbH & Co. KG)

Private Limited Company (GmbH)

Public Limited Company (AG/SE)

Individual

Registered Cooperative

Other legal entity

Partnership under German Civil Code (GbR)

Comparision between participating and winning actors -

first four PV auction rounds

Success rate within legal form Number of bids Number of successful bidsx% Sourc

e:

Ecofy

s b

ased o

n o

ffic

ial data

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etz

A

© ECOFYS | |

Conclusions and outlook

Conclusions

> So far high competition and decreasing prices; future price stabilisation?

> Auction effectiveness cannot be judged yet, but likely that projects will be

realised

> Some market concentration; trade-off between efficiency and actor diversity

Outlook

> Combined auction for ground-mounted and large PV rooftops will result in

de-facto volume increase for ground-mounted PV

> Cross-border opening of one auction round per year will increase

competition; pilot with Denmark


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For more information, please contact:

> Dr. Corinna Klessmann

Principal Consultant

Ecofys

Albrechtstraße 10 c

10117 Berlin

Germany

E: [email protected]

I: ecofys.com


mailto:[email protected]

http://www.ecofys.com/en/experts/klessmann

Technology

PV auctions in Germany: First results and lessons learnt