North Sea Wind Power Sites Fail to Attract Bidders in Latest Auction

Two wind power sites in the North Sea failed to attract bidders in Germany's latest auction, marking the first time an offshore wind auction in the country has failed. The sites, N-10.1 and N-10.2, are adjacent to each other and located centrally within Germany's exclusive economic zone. Industry associations attribute the lack of interest to increased risks for wind farm developers, including rising costs, unpredictable electricity markets, and high construction density at sea. The Federal Network Agency will re-tender the sites in June 2026.

Germany's latest offshore wind auction, held on August 1, 2025, marked a significant milestone as it failed to attract any bids. This event, which occurred for the first time in the country's history, has raised concerns about the current auction design and its impact on the offshore wind industry [1].

The auction, which covered two sites, N-10.1 and N-10.2, aimed to install a total capacity of 2.5 GW. Despite the substantial capacity, the lack of bids suggests that developers are facing significant challenges. Stefan Thimm, Managing Director of the German Offshore Wind Energy Association (BWO), attributed the failure to the auction design, which he believes forces developers to bear risks beyond their control without adequate protection [1].

The BWO has called for a fundamental overhaul of the auction design, emphasizing the need for regulatory reforms to make the German offshore wind market more attractive to investors. Thimm noted that if the regulatory framework is improved, the industry could invest more than €2045 billion in offshore wind expansion by 2030 [1].

The Federal Network Agency (BNetzA) has announced that both areas will be re-auctioned on June 1, 2026, under the rules that apply to non-centrally pre-surveyed sites. This decision reflects the agency's intention to address the issues that led to the failure of the initial auction [3].

The lack of bids has also raised concerns about the broader offshore wind market in Germany. According to the German Federal Maritime and Hydrographic Agency (BSH), the sites could supply nearly all households in Cologne. The failure to attract bids for these sites could hinder Germany's progress in meeting its renewable energy targets and reducing its carbon footprint [1].

The German Economy Minister, Katharina Reiche, warned that flawed site selection and shifting market dynamics are undermining offshore wind tenders. She highlighted the risks associated with the tendered areas, including erosion of foundations and highly challenging structural conditions. Additionally, she noted that changing market conditions, such as customers' reluctance to uphold Power Purchase Agreements during periods of negative electricity prices, are contributing to developers' reluctance to bid [4].

The auction failure comes at a time when the German offshore wind market is facing several challenges, including rising project and capital costs due to geopolitical tensions and supply chain bottlenecks, as well as increasingly difficult-to-predict price and volume risks in the electricity market [4]. These factors have contributed to a sluggish start to 2025 for the sector, during which Germany failed to connect a single new turbine to the grid [4].

In response to the auction failure, industry groups have pushed for the government to introduce improved auction measures to ensure more turbine additions. The BWO has called for the introduction of Contracts for Difference (CfD) along with long-term power purchase agreements (PPAs) to reduce electricity generation costs and make the market more attractive to investors [1].

The formation of a joint venture between JERA and BP, announced on the same day as the auction failure, may provide a glimmer of hope for the German offshore wind market. The JERA Nex BP joint venture, with a portfolio of 13 GW of net potential capacity, will focus on delivering projects from its existing pipeline in Europe and Asia while continuing to operate current assets and optimize its portfolio [2].

In conclusion, Germany's first failed offshore wind auction highlights the need for regulatory reforms and improved auction designs to attract investors and ensure the growth of the offshore wind market. The re-tendering of the N-10.1 and N-10.2 sites in June 2026 will be a crucial test of the industry's resilience and the government's commitment to promoting offshore wind energy.

References:
[1] https://www.offshorewind.biz/2025/08/06/germanys-2-5-gw-offshore-wind-tender-fails-to-attract-bids/
[2] https://renews.biz/102268/jera-and-bp-launch-13gw-offshore-wind-jv/
[3] https://www.windtech-international.com/industry-news/no-bids-submitted-for-german-offshore-wind-areas-n-10-1-and-n-10-2
[4] https://www.reuters.com/sustainability/climate-energy/german-minister-flags-risks-tenders-offshore-auctions-draw-no-bids-2025-08-06/