Onshore wind installations crashed to their lowest level in nearly 20 years in Germany in the first quarter of 2019. Can the world’s third-largest wind market recover?
German onshore wind is “in a critical phase” after flawed auctions led to a 10-gigawatt permitting backlog that is endangering renewable energy targets, experts said.
The country installed just 134 megawatts of onshore capacity in the first quarter of this year, the lowest level since 2000, and will be lucky to reach 2 gigawatts by year’s end, the European wind industry body WindEurope warned this month.
The level is under half the 4.3-gigawatt average seen in the country over the last five years and “well below what Germany needs to meet its own 65 percent renewable electricity target by 2030 and to deliver its share of the EU’s 32 percent renewable target,” said WindEurope.
Indrayuth Mukherjee, a global wind power analyst with IHS Markit, said a botched auction design in 2017 and “a series of cascading problems because of that” were to blame.
Aiming to improve public acceptance of wind energy, the German administration had opened up the auction to community-based projects that were allowed to enter without having been granted a permit and with a longer-than-usual period for construction.
Community projects swept the board in the auction, and developers subsequently took a nonchalant approach to applying for permits.
“This clashed with other wind projects lining up to secure permits for bidding in the country’s 2018 auctions, which resulted in delays and caused the last three German tenders to be undersubscribed,” Mukherjee said.
The situation has been worsened by understaffing in permitting offices, he said.
The average time to get a wind farm permit has roughly doubled, to up to 300 days, according to the German wind energy association Bundesverband WindEnergie (BWE), and in the first quarter of 2019 only 413 megawatts of capacity got through the process.
Even after permitting, Germany’s onshore wind farms face an uncertain future, BWE CEO Wolfram Axthelm said. Despite the government’s attempts to woo wind-friendly communities, “many projects face lawsuits by environmental groups and local citizen movements,” he said.
As a result, recent auction rounds have been under-subscribed by an average of around 55 percent. Mukherjee said Germany would need to install at least 3 gigawatts of new onshore wind capacity a year to meet the EU’s 2030 renewable energy target.
Meanwhile, the German renewables association Bundesverbands Erneuerbare Energie this month said at least 4.5 gigawatts a year of new onshore capacity would be needed for Germany to reach its 2030 goals.
Axthelm claimed policymakers had been slow to pick up on the regulatory deficiencies of the 2017 auction because of the long time it takes to get plants built.
Projects require anything from three to five years from planning to completion in Germany, which means many wind farms from the 2017 tender are still unbuilt. Now, though, the government is aware of the project shortfall and is taking steps to correct it, Mukherjee said.
Last year, for example, Berlin said it would add 4 gigawatts to the onshore wind capacity due to be tendered from 2019 to 2021. However, said Mukherjee, “simply declaring more tenders will not resolve the issue at hand. The priority should be the permitting bottlenecks.”
Axthelm also said the actions were “not enough.”
The BWE has suggested reforms to the permitting process, along with public policy and environmental law, and has denounced the lack of staff handling permits administration.
Despite the challenges, most authorities believe German onshore wind could get back on track if current permitting problems are overcome.
“We expect average annual net additions to reach 3.6 gigawatts through the 2020s, to reach a cumulative capacity of 93 gigawatts in 2030,” Mukherjee said.
Repowering could help, he said. IHS Markit expects the German repowering market to equal around 1.4 gigawatts of onshore capacity a year up until 2030.
“However, if the situation continues as it is without any government intervention, it will be hard to imagine that the country will reach its target,” said Mukherjee.