Tender for 1.5 GW New Solar Projects Soon in Germany

In a bid to add speed to the lethargic growth of the solar energy segment in the country, the Federal Network Agency (Bundesnetzagentur) of Germany has said that it is about to come up with an additional tender for the development of 1.5 GW of solar power capacity.

The Federal Network Agency stated that the players can submit their proposals for the development of their projects by January 15 next year.

As per the announcement, the size of the proposed projects should not be more than 100 MW. The proposed solar projects that win awards from the government will have to complete the projects within nine months. This is after they have secured feed-in premium tariffs.

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The upcoming tender has also been termed as a ‘crisis tender’ since it is in response to the prevailing energy crisis in Germany owing to the Russia-Ukraine conflict.

Surrounding Criticism 

The German Government’s move for the new tender has also received some criticism for it. The German Solar Association or ‘BSW-Solar’ has said that the time limit provided by the German Agency for the complete construction of the solar projects is too short and unrealistic. It also said that there are land restrictions that disallow timely completion of solar projects and the land restrictions need to be relaxed.

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The Challenge of Undersubscription

The association said that many federal states in Germany are yet to open up areas in arable lands and grasslands that are in disadvantaged parts of Germany, which hinders solar power development. Hence, developers have limited sites for potential development of solar farms.

The Federal Network Agency has not been successful in allocating all of the planned capacity mentioned in previous solar tenders. In the last tendering allocation, the agency could allocate a mere 700 MW out of the planned 1,126 MW earlier this year.

In 2021, Germany added a mere 5.3 GW of solar energy. In April 2022, the ‘Easter Package’ was released to increase the share of renewables in the energy mix to 80 per cent by 2030 and 100 per cent by 2035. The government wants to install 200 GW of solar power by the end of this decade.

Adding to the mounting problem is that the wind power auctions have also been undersubscribed over the last few years. Only planned volumes in the last few months were completely auctioned off. Solar power auctions have also been primarily been oversubscribed. Last month, an undersubscribed solar tender became a cause of concern and raised questions about investor interest.

Carsten Körnig, head of the German Solar Industry Association (BSW), said that the current “location corset,” due to the tight restrictions at state level for allotting land for the purpose of solar power plant construction, would lead to a slowdown in solar extensions. He also added that the current framework “is out of date and is curbing the expansion of solar energy, while the lights could go out in Germany.” He said that the current tender conditions should be looked into or the, “future solar tenders are likely to be undersubscribed regularly.”