The German Offshore Wind Energy Association (BWO) is calling for a legally regulated mechanism for the voluntary return and rapid retendering of offshore wind energy sites. The aim is to clarify potential non-implementation cases early on in order to avoid years of blocked sites and grid connection capacities. This should limit damage to the expansion path, supply chains, and Germany's industrial base. Potential delays affect a project and procurement volume of up to €50 billion.
The BWO proposes a mechanism for the voluntary and accelerated return of land for awarded projects. This would allow blocked areas to be quickly re-tendered and awarded, thus ensuring the continuation of development.
'The German government has failed to include a buyback option for awarded projects in the offshore wind auction rules. Furthermore, the existing auction design has imposed significant risks on companies, risks they can barely influence – particularly in cases of severe grid connection delays. There is a risk that areas for up to 16 gigawatts of installed capacity will be blocked. A standstill in project development threatens the supply chain. Moreover, there will be a shortage of climate-friendly electricity for the economy and society,' explains Stefan Thimm, Managing Director of the German Offshore Wind Energy Association (BWO). 'Therefore, we need a mechanism that ensures an orderly, reliable, and swift handling of potential projects that cannot be realized. Billion-euro projects with no prospect of being built pose a real threat to the supply chain. We expect the German government to implement this proposal from the offshore wind industry promptly,' Thimm adds.
Regulation for up to 16 gigawatts
The BWO proposal concerns projects from 2023 to 2025 that have not yet received a final investment decision. The core of the mechanism is that companies should be able to declare a voluntary return of the land within four weeks of the regulation coming into effect. The land should then be quickly reallocated under the new auction rules from 2027 onwards, possibly via a special tender.
The industry proposal stipulates that companies returning land may not bid again on the same sites and must submit existing preliminary investigation results and project data to the authorities. Furthermore, only one award per bidder per new tender round should be possible. Payments for the environmental and fisheries components will not be refunded in the case of voluntary return. Security deposits, however, are to be fully repaid so that companies contribute to damage mitigation at an early stage.
Up to 50 billion euros in investments affected
In the offshore wind auctions for the years 2023 to 2025, 14 offshore wind sites with a total capacity of 17,8 GW were awarded. Around 16 GW of this falls under the proposed transitional arrangement. With an investment of around three billion euros per gigawatt, this results in a project and procurement volume of approximately 50 billion euros on the wind farm side. Additional costs will be incurred on the grid side. The auctions resulted in awards totaling at least 16,6 billion euros. The Federal Network Agency does not specify a final bid amount for areas that have undergone central pre-investigation.
The transitional arrangement in detail:
Clear deadline for voluntary return decisions
Voluntary returns should be possible within a clearly defined timeframe, no later than four weeks after the legal basis comes into force.
This tight deadline serves to establish clarity early on regarding the actual prospects for realizing the projects in question. A swift and reliable decision is crucial for the expansion path, network planning, and the industrial value chain. The sooner clarity is achieved, the lower the risks of long-term delays and industrial uncertainty.
Rapid re-tendering of the returned areas
Returned land should be transferred to the new 2027 auction design as soon as possible, possibly also via special tenders outside of regular auction dates.
The aim is to keep the time between the return and re-allocation of land as short as possible, so that areas and grid connection capacities can be quickly returned to a realistic implementation path. This serves both to secure the expansion targets and to stabilize the project pipeline for the supply chain.
Adjustment of implementation and grid connection deadlines
Implementation deadlines are to be adjusted in close coordination between the Federal Network Agency, BSH, transmission system operators and the Federal Government, so that new project developers do not suffer structural disadvantages from existing grid connection schedules.
The background to this is that grid connection planning and project development are intertwined over many years. A new tender can only be successful if new project developers are given realistic and investable timelines. At the same time, it should be prevented that already planned grid infrastructure remains unused for an unnecessarily long time.
Transmission of existing preliminary studies and project data
Existing preliminary studies, technical findings and project data are to be submitted to the Federal Network Agency upon return.
This allows for faster tendering processes and more efficient continuation of subsequent project developments. At the same time, it prevents previously acquired knowledge from being lost or having to be painstakingly recreated. This reduces delays, increases planning efficiency, and supports the quickest possible resumption of project development.
Exclusion of renewed bids on returned areas
Companies should not be allowed to bid again on land they have returned themselves.
This regulation serves to safeguard fair competition and is intended to prevent individual market participants from gaining additional competitive advantages through informational advantages or strategic return decisions. At the same time, it strengthens the credibility of the entire mechanism.
Limiting the number of successful bids per bidder in new tenders
Additionally, it is planned to limit the number of successful awards per bidder within a new tendering round.
The aim of this regulation is to ensure the broadest possible distribution of implementation opportunities and to safeguard effective competition, including within new tenders. At the same time, it is intended to prevent individual market players from achieving disproportionate market concentrations during a transitional period.
No refund of the initial payment already made.
The first payment component, amounting to 10 percent of the negative bid component pursuant to Section 58 WindSeeG (“marine nature conservation, fisheries and transformation component”), which is due one year after the award of the contract, shall not be refunded even in the case of a voluntary return.
This explicitly preserves the fundamental binding nature of the tenders. The regulation serves to safeguard the seriousness of the bids and confidence in the tendering system, while simultaneously clarifying that the proposed transitional arrangement does not aim to retroactively improve the economic position of individual market participants. The economic consequences of the original bidding decision thus remain substantially in place.
Full refund of the bid bond as an incentive for early damage control
At the same time, the proposal stipulates that the deposited bid bond or security deposit can be fully refunded under the transitional arrangement, provided that projects are returned early and the companies actively contribute to mitigating damages.
The rationale is that early disclosure of missing implementation prospects creates significant advantages for the expansion path, network planning, and supply chain. Only with early clarity can areas be re-tendered promptly, network connection capacities utilized efficiently, and additional delays minimized. A prerequisite for this is, in particular, the complete availability of existing preliminary studies and project data, so that new tenders and subsequent project developments can proceed as efficiently as possible.
The full reimbursement of the bid bond is therefore not an economic advantage, but rather part of a mechanism for early damage limitation in the interest of the overall system.
About the BWO
The Federal Association for Offshore Wind Energy (BWO) is the political lobby for the offshore wind industry in Germany. We pool the technical expertise of companies along the entire value chain, from manufacturers to developers and operators to offshore wind energy service providers. For politicians and authorities at federal and state level, the BWO is the central contact for all questions relating to offshore wind energy.
